Liston’s beer bill fails to ferment in House

The Colorado Statesman

It isn’t often that a legislator filibusters his own bill, but Rep. Larry Liston, R-Colorado Springs, stretched out the debate on his House Bill 11-1284 for more than two hours, in hopes that it would survive the House.

It wasn’t to be.

HB 1284 would have allowed grocery and convenience stores to sell full-strength beer, a measure that the Colorado Licensed Beverage Association said would kill jobs and businesses and would have allowed minors to sell malt liquor. It’s the fourth consecutive year that the stores have attempted to get full-strength beer.

Currently, only liquor stores are allowed to sell full-strength beer, while grocery and convenience stores can sell 3.2 percent beer. The Colorado Retail Council, one of the supporters of HB 1284, said the bill was “simple and straightforward reform legislation” that would update the current system that “limits liquor stores and restaurants to selling only beer above 3.2 percent alcohol — and grocery and convenience stores to selling only beer at 3.2 percent alcohol or below.”

Rep. Larry Liston, R-Colorado Springs

CRC director Chris Howes said the 3.2 percent beer law “is only on the books to hamstring our members from competing in the free market. Colorado leads the nation in so many ways, yet when it comes to common-sense beer laws, we trail virtually the entire nation. Monopolies are very tough to break but, eventually, they all do, and the liquor store monopoly is no exception.”

But an economic impact study produced by Summit Economics of Colorado Springs on behalf of the CLBA said that passage of HB 1284 would cause independent liquor stores to lose half of their full-strength beer sales in the first year, and 70 percent within three to five years. Summit estimated that 700 stores would close in the first three years, with the loss of nearly 5,000 jobs, and an economic impact to the state of $200 million in lost wages and nearly $12 million in lost state and local taxes.

In contrast, Coloradans for Convenience, a lobbying group supported by the grocery and convenience stores, pointed out that those businesses have far fewer violations in selling liquor to minors, compared to liquor stores. The group also maintains that sales of craft beers, which are generally made by independent, small brewers, would not be negatively impacted by selling full-strength beer in grocery and convenience stores, an argument made by the CLBA and the craft brewers guild.

Among the Democrats sponsoring HB 1284: co-prime sponsor Rep. Crisanta Duran, D-Denver, who said the bill would create jobs for workers in unionized grocery stores.

And that meant HB 1284 provided unusual common ground between a Denver Democrat and a Colorado Springs Republican and between grocery stores and their unions.

During its second reading debate Monday, HB 1284 got amendments thrown at it at almost every turn in an attempt to gain more support. That included amendments passed by the House Economic and Business Development Committee that would allow for non-perishable foods to be sold in liquor stores and to let liquor store owners have more than one store, currently prohibited under state law. Under the amendment, the additional liquor stores would be limited to 5,000 square feet or less, the same size limitation for convenience stores listed in state law.

While he argued for the bill’s survival Monday, Liston had plenty of visual aids at the ready. He kept boxes nearby that contained petitions gathered by Coloradans for Change. Liston said the petitions had more than 130,000 signatures from consumers: “real people, your voters and your constituents.” He showed pictures of grocery stores that already sell craft beers with 3.2 percent alcohol content, pictures that showed liquor stores growing in California, where a similar law already exists; and a picture of a Denver Post article that showed how well the craft brewers were doing.

“We favor good competition,” Liston told the House Monday. All consumers “are asking for is a simple choice as to where to buy their full-strength beer,” he said, adding that liquor store owners would lose nothing under the bill; they can sell the same things they’ve always sold. But consumers “and your constituents” will have the opportunity to buy full-strength beer when they fill up their gas tanks or need a six-pack for the barbecue, Liston said.

Rep. John Soper, D-Thornton, questioned whether passage of HB 1284 would lead to grocery and convenience stores seeking future approval to sell wine and hard liquor, and asked Liston to commit that he wouldn’t push that legislation.

“You have my word — Scout’s honor, I’m an Eagle Scout — that as long as I am here that I will not come back to you and carry legislation” that will ask for wine or spirits, Liston said. “I think we have a Bible in the House if we need to bring that out,” joked Rep. Laura Bradford, R-Grand Junction, who chaired the floor debate.

“I’ve listened to your concerns about safety and responsibility,” Liston told the House, introducing an amendment that said people couldn’t consume single drinks in the grocery or convenience stores, and that got jokes about driving a grocery cart under the influence. Another amendment from Liston, adopted by the House, would prohibit grocery and convenience stores from selling alcohol-laced candy, or beer with an alcohol content above 11 percent, which is the content of many craft beers.

Duran told the House she supported HB 1284 because it supports the creation of quality jobs with livable wages, worker-friendly policies and pensions. Grocery stores will add employees, she said, and she cited a 2009 study from Henry Sobanet, then with Colorado Strategies, which said that extending full strength bill sales can occur without widespread closing of liquor stores. Such sales also would promote lower prices and continued employment at convenience stores, and many states with more lenient liquor laws have “higher per capita” numbers of liquor stores, she said. (Sobanet is now the director of the governor’s Office of State Planning and Budgeting.)

Liston said he didn’t blame the liquor stores for trying to hold onto their monopoly, one that he said they’ve had for 78 years. Consumers want to be treated like rational adults, he said, and wanted to be given a choice that might just be a little more convenient. And liquor stores would get to keep two-thirds of their monopoly, according to Rep. Kevin Priola, R-Henderson, because they would still be the only place to get hard liquor.

The opposition, however, charged back with concerns about lost jobs, more access to alcohol, and “mom and pop” liquor stores going under.

People in her district told Rep. Rhonda Fields, D-Aurora, that they did not want greater access to alcohol. They want jobs, she said, in opposing HB 1284. “They want me to support and promote small business,” she added. Some of the small businesses are owned by families who have taken out credit, she said, and if HB 1284 passed it would impact their revenue. “It will double and triple the amount of alcohol in my district. We don’t need it, we need jobs…we need access to fruit and vegetables” from grocery stores, not alcohol.

Big business has no business driving out small business, added Rep. Angela Williams, D-Denver, who said that the state would lose 5,000 jobs but only add maybe 300. “Do the math,” she said.

Families have made investments based on the regulatory structure and the promise in statute that they can have their liquor stores and not compete against the large corporation next door, said Rep. Claire Levy, D-Boulder. “People have invested their life savings based on the assumption of the value” of that liquor store, she said.

Republicans were opposed, too. Rep. Brian DelGrosso, R-Loveland, pointed out that liquor stores aren’t allowed to sell the same products as grocery or convenience stores, such as software, cell phones, toilet paper, tires, hot dogs or gas. “I’m a free market guy but this just messes with the free market process further,” he said. “I would buy the argument” that this would “free up the free market process if we were to allow liquor stores to sell everything that a Target or Wal-Mart” could sell.

In one last attempt to keep HB 1284 alive, Liston tried to put an amendment on the bill to allow voters to decide the issue, and got a weak response in a voice vote. Bradford joked that it might help if everyone said “aye” together. It didn’t.

That was followed by a standing floor vote on the bill, and HB 1284 garnered only 18 supporters out of the 65 in the House, mostly Republicans.

The CLBA cheered the bill’s demise, stating that grocery and convenience stores, owned by out-of-state interests, “do not have support from Coloradans to push a ballot initiative, so they have annually lobbied the Capitol instead. The bill threatened hundreds of independent liquor storeowners — who by law can only own a single store,” a CLBA statement said Monday.

John Carlson of the Colorado Brewers Guild added that the “current system of independent retailers has fostered a profitable structure for brewers and a diverse, beneficial market for beer lovers. If altered to allow chain stores to sell full-strength beer, those independent liquor stores that carry a diverse array of Colorado craft beer will be put out of business, reducing the public’s access to craft brewers’ products.”

Jeanne McEvoy of the CLBA told The Colorado Statesman that the vote to defeat HB 1284 was “overwhelming. We’re very hopeful that the out-of-state corporations will listen to Colorado and discontinue their attack on small businesses.”

CRC’s Howes said in a statement that the failure of HB 1284 would keep Colorado “lagging behind 45 other states that have archaic beer laws” and called the vote “a win for higher prices, a lack of consumer choice and a loss for jobs and economic growth.”

“It’s a shame that once again the liquor store monopoly was successful in letting government — not consumers — continue to decide where adults can purchase beer,” Howes said. “We have a patchwork of antiquated laws that have created confusion for our customers, and cost good-quality jobs. Consumers for yet another year will be subject to the seven-day-a-week regime of liquor store control over the beer, wine and spirits market. Sooner or later, consumers will win.”
 
The issue of who sells what isn’t over with the demise of HB 1284. Coloradans for Convenience and the CRC are also backing Senate Bill 194, which would allow convenience stores to sell full-strength beer in limited hours. The bill is sponsored by Senate President Pro Tem Betty Boyd, D-Lakewood, and is awaiting second reading in the Senate.

Marianne@coloradostatesman.com