Bill allowing beer in corner stores falls flat

By Jimy Valenti
THE COLORADO STATESMAN

Legislation allowing full-strength beer to be sold in corner stores fell flat this week after a legislative committee voted 8-3 against House Bill 1186, sponsored by Rep. Larry Liston, R-Colorado Springs.

Opponents of the bill successfully argued that its passage would hurt small businesses in the state, while proponents were hoping to end a liquor store monopoly on selling full-strength beer in Colorado.

The bill had passed the Business Affairs, Labor and Technology Committee two weeks prior.

“We bent over backwards to make this as fair as possible,” said Mark Larson, the executive director of Colorado Wyoming Petroleum Marketers Association which had lobbied hard for the legislation. “Every step of the way we did it with an open palm and constantly asked people ‘what do you need?’”

In an effort for compromise, HB 1186 was amended to:

• Allow liquor stores to sell any food item
•?Allow convenience stores to sell full-strength beer only during hours currently allowed for liquor stores
• Require 18-year-old clerks to have a 21-year-old supervisor on duty when making a full-strength beer sale, and
• Require a one time $2,000 licensing fee and $2,000 annual payments for convenience stores seeking a full-strength beer license.

Convenience storeowners testified that they have been dealt two devastating blows by the Legislature in recent years starting with the 2007 removal of gasoline low-cost selling regulations allowing grocery stores to sell gas below cost.

In 2008, the Legislature repealed a 75-year-old prohibition of Sunday sales in Colorado. According to Liston, this gave liquor stores a virtual monopoly on beer sales and upset the convenience store business models.

Robert Marcus, a Denver area 7-11 franchisee, said he brought in $1200 a week in 3.2 percent beer sales with $900 coming in on Sundays before the Sunday liquor laws were changed. Marcus testified that now his 3.2 percent beer sales are down to $130 a week.

Liquor stores, craft brewers and alcohol safety groups successfully teamed up to kill Liston’s bill.

Liquor storeowners testified that altering current regulations would put them out of business because beer makes up 50-80 percent of their total sales. Craft brewers said large convenience store chains with limited cooler space would overlook their products and alcohol safety groups, like Mothers Against Drunk Driving, have said more access to alcohol would account for increased underage drinking.

Eric Wallace, owner of Left Hand Brewery in Longmont, Colo., testified that the state’s liquor regulations have helped spawn Colorado’s 114 craft breweries.

“For us this is something worth fighting for,” said Wallace, who fears his product would be overlooked by convenience stores.

Larson said those fears are unwarranted. He said convenience storeowners sent letters to liquor stores and the Colorado Licensed Beverage Association swearing they would designate 25-50 percent of their cooler space to craft brewers.

A bi-partisan vote killed the bill for various reasons.

Rep. Ellen Roberts, R-Durango, said the bill would hurt Colorado’s craft brewers and liquor stores.

“This bill makes me feel like a lab rat in a maze where we keep being confronted with these choices,” Roberts said. “All it shows me is the level of government interference with small business.”

Rep. Jeannie Labuda, D-Denver, said the fiscal note claiming to generate nearly $1 million was wrong. She said the fiscal impact would be a wash as some businesses pay for new licenses and others go out of business.

Rep. John Kefalas, D-Fort Collins, said he is worried about potentially doubling the number of outlets in the state selling beer. He said underage drinking would increase proportionally with these new outlets.

Larson said lawmakers succumbed to liquor store complaints and unwarranted craft brewery fears.

“The liquor stores were willing to throw anything up on the walls to see if it stuck,” said Larson. “In these committee hearings you can pedal anything that you think will stick, because witnesses are not sworn in.”

James Won, owner of Pour Boy Liquors in Lakewood, said he was pleasantly surprised at the committee’s decision, but doesn’t think the fight is over.

“I’m always worried it will keep coming back,” said Won. “Hopefully now they’ve learned their lesson.”

The fight is far from over. Another bill proposing that grocery stores would have the ability to buy the liquor license from nearby liquor stores will be heard in committee next month. And a ballot initiative allowing grocery and convenience stores to sell wine and full-strength beer has also been filed.

“If it takes an initiative because the Legislature is blind or weak to screaming liquor stores calls then I guess we will be forced in that direction,” said Larson.

Larson said Colorado’s consumers are losing because liquor stores have a monopoly over full-strength beer sales. He said Colorado is atypical with 44 other states allowing convenience stores to sell full-strength beer.

“I don’t know any other thing that we could have done,” said Larson. “The one place where we failed was spending the dollars necessary to get the consumers to start calling and screaming because the Legislature completely ignored them.”

Democratic Representatives Debbie Benefield, Jerry Frangas, Daniel Kagan, John Kefalas and Jeanne Labuda and Republicans Brian DelGrosso, Ellen Roberts and Ken Summers voted against HB 1186.

Jimy@coloradostatesman.com