A coalition led by retail powerhouses is drafting ballot language to give Colorado voters a chance to decide whether to change Prohibition-era laws and allow full-strength beer and wine sales at supermarkets.
The effort — backed by King Soopers, Safeway and Walmart — is the most substantial push in recent years to expand sales outside liquor stores in one of the nation’s top states for beer.
A direct appeal to voters with a ballot initiative would come after years of gridlock at the General Assembly, where entrenched special interests battled in what lawmakers dubbed a “beer war.”
“The customer is changing, and we have to change with the customer,” said Kelli McGannon, a spokeswoman for King Soopers, the Colorado-based division of Kroger Co. “Our customers value time as much as money and are looking for convenience. Colorado’s market has changed — Colorado is one of the fastest-growing states in the country, and people are moving here from other states where this is something they had.”
Colorado craft brews are carried in Kroger and Safeway stores outside the state. Forty-two states permit grocery store wine or full-strength beer sales, Your Choice Colorado organizers said.
Craft beer is the fastest-growing sales category for Kroger stores, McGannon said. Safeway spokewoman Kris Staaf said craft beers account for about 30 percent of total beer sales throughout the chain.
The Your Choice Colorado coalition will debut its effort Wednesday in Denver, but many questions remain about the organization’s next steps and how it will word the 2016 ballot initiative.
The group likely will push creation of a “food store” liquor license: Businesses where food accounts for 25 percent or more of sales — not including gasoline — would be able to sell full-strength beer and wine. There would be no limit on the number of food store liquor licenses a business could hold, and local municipalities could have a say in the adoption of those licenses, Your Choice Colorado organizers said.
The group is weighing whether to include hard liquor sales in the proposed changes. They may also consider legislation designed to force a compromise and avoid a ballot fight that, based on prior initiatives, could top $30 million in campaign spending.
Under current state law, grocery and convenience stores are allowed to sell only low-alcohol beer known as 3.2 percent beer. Colorado is one of only five states that still license sales of 3.2 percent beer.
Colorado’s current system is entrenched. Through Oct. 5, the state tallied 1,617 licensed liquor stores that can sell full-strength alcohol and 1,560 grocery and convenience stores permitted to sell 3.2 percent beer.
Retail chains — such as Costco, Rite Aid, Trader Joe’s and Whole Foods — are limited to a single full-service liquor license, and most are located in the Denver area, according to the state Department of Revenue.
The opposition — primarily liquor stores and some craft breweries — argues that expanding the law could shutter stores and cut craft brewers’ profits. They also claim that the current system played a pivotal role in developing the ecosystem that nurtured a now-$1 billion craft beer industry in the home state of Coors.
“Small breweries can walk into smaller, independent liquor stores and do business with them face to face,” Colorado Brewers Guild marketing director Steve Kurowski said. “It’s a very difficult system to sell your product through grocery stores. Grocery stores probably will not want to deal with 300-plus breweries walking through their doors.”
The current system, the opponents say, allows more craft beer and spirits makers to share shelf space with the major brands, leveling the competition. A grocery or convenience store will dedicate most of its space to big-name labels and leave little room to showcase smaller brewers, said Jim Dean, general manager of Hazel’s Beverage World, a 36,000-square-foot liquor store in central Boulder.
“I think our system in Colorado, it just works,” he said. “There’s not a huge groundswell for this. It’s just the grocery stores would like to have it. They’ve been to the legislature six times in the last few years, and they’ve rejected it every time.”
The sentiment prevailed for four straight legislative sessions starting in 2008, as liquor store owners defeated attempts by grocery and convenience stores to sell full-strength beer. The resistance likewise scuttled related efforts to put the measure before voters in 2010.
Rep. Kevin Priola, R-Henderson, pushed the latest legislative effort in 2011 — an unsuccessful bill to expand beer sales at supermarkets but also grant liquor stores exclusive rights to sell spirits.
“I’ve learned years ago the legislature is pretty much locked down on the side of liquor stores,” he said. “But I approached it from the side of the consumer — the consumer wants choice.”
Sen. Chris Holbert, R-Parker, said the current system is so ingrained that any major changes would disadvantage the current law-abiding businesses.
“Some are asking to use the force of government to force a change in the marketplace that will ultimately pick winners and losers,” he said.
In recent years, limited public polling showed mixed results on how voters would respond if the question were put to the ballot. But supporters see new hope in the waves of residents — as many as 4,000 a month — moving to Colorado, often from states where it’s normal to see full-strength beer in grocery and convenience stores.
“A majority of voters are likely to vote for this change because they see this as a measure of convenience,” Holbert said.
