Ballot initiative would untap sales of alcohol at grocery stores

Liquor stores likely to lodge spirited fight

By Jimy Valenti

The legal barrage attempting to open up Colorado’s beer and wine sales beyond liquor stores continues just a few weeks after the House Finance Committee killed legislation allowing convenience stores access to sell full-strength beer.

A proposed ballot initiative was heard before the Colorado Legislative Council on Thursday that would allow grocery stores to sell beer, wine and liquor, while another bill giving grocery stores the right to buy-out the liquor license of nearby liquor stores will be heard in legislative committee April 7.

Ballot initiative 48 would:

• Eliminate the legal distinction between 3.2 percent and full-strength beer;

• Allow convenience stores to sell full-strength beer;

• Allow grocery stores to sell beer, wine and sprits;

• Allow liquor storeowners to own an unlimited amount of locations — currently liquor stores owners can only have one location.

“We’ve got our war chest and we’re ready to fight it if it gets to the ballot and that’s a big if,” said president of the Colorado Licensed Beverage Association, Jeanne McEvoy.

Blake Harrison is the initiative’s lead proponent. Harrison, who is vying for the Democratic nomination for Denver’s HD 7, is a deputy district attorney for the City and County of Denver. He met with the Colorado Legislative Council to ensure the proposal’s language matched his intent.

The Colorado/Wyoming Petroleum Marketers Association and the Colorado Retail Council also back the proposal, which would delete sections in the statute defining the difference between malt beverages and 3.2 percent beer, thus allowing those with 3.2 liquor licenses to sell full-strength beer without applying for a new liquor license. It also deletes other regulations concerning the industry.

“It’s kind of eloquent the way it happened because it was just a lot of deleting,” said Harrison.

Harrison has worked on this issue for the last eight years. In 2002, while still a DU law student, Harrison unsuccessfully tried to eliminate Colorado’s blue laws. He didn’t get enough signatures for the measure to make the ballot. The legislature removed the ban on Sunday sales in 2008. Last November, he tried to get an initiative on the ballot that would allow grocery stores to sell only full-strength beer and wine, but it received no industry support.

Now, with major industry support, Harrison said he believes Coloradans will be able to shop for their alcohol where they choose.

“It’s about free commerce,” said Harrison. “It’s about the ability for a willing buyer and seller wishing to make a business transaction without the government getting in the way.”

McEvoy said Colorado has the safest and most convenient liquor laws in the country and said that voters should not sacrifice safety and the fate of thousands of small businesses for perceived consumer convenience.

She said the proposal would not make shopping for food and alcohol more convenient because most grocery stores in the state have liquor stores next door.

“I just want to buy wine and food at the same place,” said Harrison. “People want to find a nice piece of fish and a local great bottle of wine to go with it and have experts help them decide. In Colorado that’s illegal and that’s crazy.”

McEvoy said the state’s 1,600 liquor stores are the gateway for Colorado’s craft brewers and that the current system has allowed craft brewers to flourish. Many craft brewers have expressed concern that large grocery store chains will overlook their products.

Harrison disagrees. He said he admits some liquor stores will go under, but that a new market of liquor stores specializing in local beer and fine wine and spirits will emerge.

W. Lee Earhert owns Chamber’s Wines and liquors in Aurora. He said he would be forced to specialize his business if the initiative passes. Earhert said mainstream alcoholic products make up 40 to 60 percent of his sales and would be lost to grocery stores.

“I have been in the business for 37 years,” Earhert said. “I don’t have a pension. My retirement plan is to sell my business and so my retirement may go down 40 percent. Of course I’m scared.”

The ballot initiative does offer liquor storeowners a compromise by allowing them to own and operate an unlimited number of locations, where currently they can only own one.

McEvoy said that it’s a nice gesture, but it takes around $3 million to open a new store. She said many liquor storeowners could not afford to open multiple stores. McEvoy said the biggest reason ‘mom and pop’ liquor stores will be hurt by the proposal is purchasing power. Large chains can negotiate prices for inventory for all their locations.

“They have quite the running head start,” McEvoy said. “We just can’t compete.”

HB 1279, sponsored by Rep. Buffie McFadyen, D-Pueblo West, would provide grocery stores with the option to buy-out the liquor license of liquor stores within 1000 feet. In doing so, grocery stores could legally sell beer, wine and spirits in their store. This would mean a large payday for the lucky few located close enough to a grocery store.

Harrison said that he supports HB 1279. He said if his supporters still wish to continue with Initiative 48, he would still pursue it even if HB 1279 becomes law. Initiative 48 is broader than HB 1279. It gives all grocery stores regardless of whether a liquor store is nearby the ability to sell beer, wine and liquor and also allows convenience stores to sell full-strength beer.

The proposal will now be submitted to the Secretary of State’s office for approval. Then the proponents would have to gather about 76,000 signatures from registered voters to get it on the ballot in November