3.2 beer bill goes flat

By Jason Kosena
THE COLORADO STATESMAN

A couple of weeks ago, Rep. Buffie McFadyen, D-Pueblo, was struggling to muster enough votes to move a bill out of the House Business Affairs Committee that would allow supermarkets and convenience stores to sell full-strength beer.

Liquor store owners protest the passage of HB 1192 on the West Steps of the Capitol on Wednesday afternoon.
Photo by Jason Kosena/The Colorado Statesman

After several more days, 80 witnesses and nine hours of testimony, nothing had changed. McFayden still came up short on votes, and on Wednesday, March 11, House Bill 1192 died in committee on a 7-4 vote.

“I am disappointed and am most concerned about the grocery stores and the convenience stores that are losing sales,” McFadyen said after the hearing. “My concern is whether or not this will end up on the ballot. Probably, if convenience stores and retail stores go to the ballot, they will want to include more than just beer.”

The failure wasn’t for a lack of effort. McFadyen and lobbyists for the convenience and grocery stores worked behind the scenes for more than a month, managing to delay the bill’s introduction in committee twice in hopes of finding a few more votes.

On Wednesday morning, owners of convenience stores marched from the 7-Eleven at Ogden and Colfax to the Capitol chanting “Hey! Oh! 3.2 beer must go!”

Once at the Capitol, the storeowners testified that, since the 2008 passage of legislation allowing liquor stores to remain open on Sunday, their sales of 3.2 beer have dropped by as much as 80 percent.

“Since we lost Sunday sales last year we have lost a lot of our revenue and we are here today for a chance to get that back,” David Harper, owner of a 7-Eleven franchise in Colorado Springs told The Colorado Statesman before the hearing.

Convenience store owners march by the Argonaut Wine & Liquor store on Colfax Avenue.
Photo by Jason Kosena/The Colorado Statesman

Harper was just one among the throngs of convenience store owners who told the committee that, unchecked, such losses will lead to layoffs.

As the convenience store owners marched, an equally plucky cadre of liquor store owners gathered on the Capitol’s West Steps and held signs predicting equally dire consequences for their industry if HB 1192 passed.

The liquor store owners also told the committee that beer sales make up the lion’s share of their revenue, and that the passage of HB 1192 would force many of them out of business.

They argued that supermarket chains and other large retailers with access to bulk distribution discounts on full-strength beer would soon price their mom-and-pop businesses out of the market.

“I am worried about my job and the business,” said Nick Gastiglionie, a manager of a liquor store in Loveland.

“My boss has basically said that, if this bill passes, we will have to cut three or four employees. That is scary for us and is not good for our economy,” he said. “The spirits industry employs thousands of people in Colorado. And their jobs, their livelihood are at risk now.”

As the nine-hour hearing wore on, lawmakers passionately offered their reasons for supporting or opposing the legislation.

Rep. David Balmer, R-Centennial, said the conversation should have centered on consumer convenience and on bringing fairness back to Colorado’s liquor laws, which, with the repeal of the Sunday sales ban, now unevenly favor liquor stores.

Convenience store owners stand outside of the 7-11 at Ogden St. and Colfax Ave. in support of the passage of HB 1192 on Wednesday.
Photo by Jason Kosena/The Colorado Statesman

“Last year’s bill was a dramatic hit to small business people in Colorado,” Balmer said. “The C-stores took it in the teeth after that. And I look at this bill as a way to help small business people in Colorado. They need this to compete.”

Lawmakers who favored killing the bill disagreed, saying this isn’t the right time to rework the state’s 3.2 beer laws.

“I don’t believe our liquor laws make sense, but I don’t believe that we should deregulate them in stages and steps,” said Rep. Joe Rice, D-Littleton, who argued that liquor sales should instead be regulated through a deliberate and dedicated process that might take “a number of years.”

One impact of the proposed law that caught attention during testimony was the effect of the law on the state’s craft brewers. Colorado, known for its large assortment of homemade brew, has long been the nation’s epicenter of microbreweries and craft beer operations.

One brewer, Eric Wallace, owner of Longmont’s popular Lefthand Brewery, said he opposed the bill because it would make it harder to market his beer in Colorado.

Wallace said that because Colorado’s liquor stores are independently owned and operated, it’s fairly easy to get his specialized product onto their shelves. But if the state were to move to a system that shifted sales decisions to large corporate entities, his business could suffer.

“We would absolutely love to sell to the convenience stores, but the reality is that getting into those stores is extremely hard and extremely limited, as they tend to favor national brands,” Wallace said. “They tend to have only one or two (refrigerator) doors in their stores for beer and so there is very limited space.”

Rep. Buffie McFadyen, D-Pueblo, testifies Wednesday in favor of HB 1192 that would allow convenience store owners and grocery stores to sell full-strength beer.
Photo by Jason Kosena/The Colorado Statesman

Some lawmakers dismissed that argument, including Rep. John Soper, D-Thornton.

“I think that your profits are fine, and I think that if your customers are loyal they are going to continue (shopping) where your product is,” Soper said.

This attempt to abolish Colorado’s 3.2 laws is not likely to be the last, supporters said.

Lobbyist Sean Duffy, who worked with McFadyen to drum up support for the bill, said he wouldn’t dismiss the possibility that the legislation would re-emerge in the form of a ballot measure.

“We have more than 70,000 signed petitions, and that shows that Colorado consumers are looking for more choice and convenience in where and how they get their beer,” Duffy told The Colorado Statesman after the hearing. “I think it would be fair to assume that if they did that, they would want to include more than just beer.

“They would want to make it worth their while.”

That sentiment was echoed as convenience store owners were leaving the Old Supreme Court Chamber after the nine-hour hearing.

“See you next year,” one storeowner said to another.

“Same place, same time, same issue,” the other responded.

Jason@coloradostatesman.com