O&A Masthead

Colorado News —
June 2018

Columnist — Joyce Trent

DENVER — In what is being described as the most momentous development since the lifting of Prohibition, Colorado convenience stores will be able to sell full-strength beer starting January 1, 2019.

A new law eliminates the 83-year-old licensing requirement that prohibited convenience stores and grocers from selling beer more potent than 3.2 percent by weight.

But legislators representing the liquor store industry, reneging on an earlier agreement that allowed passage, launched a mostly unsuccessful effort to dilute the law.

Colorado flag

Their proposals didn't sit well with supporters of the convenience stores. "A deal's a deal," protested Grier Bailey, executive director of the Colorado/ Wyoming Petroleum Marketers and Convenience Store Association, who then worked hard to thwart or at least contain the changes.

Effective Jan. 1, the new law removes the 3.2% language and automatically converts existing licenses of grocers and convenience stores to allow them to immediately sell full-strength beer.

For years the liquor store industry fought to prevent this change on the grounds it might drive hundreds of small liquor store owners out of business. But, faced with the certainty that the issue would be put to a vote in the next election, the industry finally agreed to a compromise that would soften the impact.

The law would not take effect until 2019 and grocers wanting to sell wine and whiskey as well as beer would only be able to expand their holdings on a graduated basis over twenty years.

But in the waning days of the Colorado Legislative session came a flurry of proposed amendments, spearheaded by Chris Holbert, one of the Senators who had signed off on the compromise, and Senator Ray Scott, who floated so extreme a proposal as to spark a claim from an opponent that he was "no real Republican" because he was trying to thwart the progress of business.

Instead of immediately allowing conversion to the full-strength license, Scott's SB 198 would have forced all existing stores to apply for a new license. Local authorities could deny authorizing the new license if they determined it would create too great a concentration of beer-selling establishments. That caused such a howl it was soon dumped.

Senator Holbert's SB 243 contained a long list of revisions that were hotly debated. A watered-down version passed the Senate and went to the House where it basically was gutted. But with three days left before the legislature was scheduled to adjourn, proponents were planning to fight to the last man and woman on the House floor.

As SB 243 passed the Senate it left a bitter taste on the palates of convenience store owners and grocers.

Their lobbyists managed to get removed an amendment that would have limited space for beer. Jon Caldara, president of the Independence Institute, a group promoting personal and economic freedom, said if they wanted to "micro-manage sales to that extent they might as well limit space given to toothpaste."

Bailey said change or transfers of current ownership would not be affected. A new store, however, could not be located within 1,500 feet of a liquor store. In areas where the population was under 10,000 that distance would widen to 3,000 feet.

The amendment even spelled out that the distance was to be measured from one door to the other. The Colorado Municipal League was able to get in a provision that there be no beer sales within five hundred feet of a school.

The proposed legislation required that stores have at least twenty percent of their total sales in food. Some store owners protested that they would go out of business. Bailey was more hopeful. He said the definition of food was broad, including any edible or drinkable product with the exception of beer. Gasoline and cigarettes did not have to be included in the tally of total sales.

Another provision prohibited stores from selling beer below cost, which Bailey doubted would be a problem.

Of great concern, however, was a requirement that any employee selling beer be 21 years old. Employees aged 18 to 20 are currently able to sell 3.2 beer in Colorado. If this passed, anyone under 21 could not stock, sell, handle or be around full-strength beer.

This would have resulted in major layoffs and limited hiring of those below that age, according to the convenience store industry.

"For a lot of young people, work in a convenience store is their first job," said Bailey. "There aren't that many jobs available for them."

Erin Launspach, district supervisor for Kum 'N Go, predicted her company would have to lay off a lot of young people. Many, she said, work a shift alone.

John Brackney, director of Strategic Community and Public Policy Engagement for Webolutions and a spokesman for expanded sales, even suggested Vicki Marble, chair of the committee that pushed the bill through the Senate, was guilty of a conflict of interest as she owns a liquor store. She denied the claim.

Caldara said the bill would come "at the expense of consumers. There are important issues that the legislature has yet to resolve like reform of PERA (the state's underfunded pension system), and fixing the damn roads."

The amended version of the law passed the Senate on May 4 by a 24-11 vote and moved to the House. With time slipping by before adjournment, proponents tried to do an end run to speed it through by assigning it to the Appropriations Committee, usually a last stop before a final vote. That was rejected so it was then assigned to the House Public Health Care and Human Services Committee whose members, astonished that it would fall within their bailiwick, just about gutted it.

That committee cut the distance between new convenience stores and liquor stores from 1,500 feet to 500 feet, allowed 18-to-20-year-olds to sell full-strength beer, grandfathered-in any stores that had obtained building permits by January 1, and eliminated the twenty percent food rule. It passed the House.

The liquor store industry considered those regulations no regulations at all and threatened to sue if it became law. Their representatives forced the issue to go to a conference committee in hopes of getting a better version.

Working until almost midnight the last day of the session, the only concessions they got were to prohibit new stores from being within 500 feet from a liquor store or school and requiring twenty percent of sales in food. However, stores with current 3.2 licenses will still be able to convert.

Bailey called the final debate "an elevated policy discussion" resulting in legislation that "achieved the intent of SB 197" (the original law) and gave both sides what they needed.

DENVER — Gasoline prices are skyrocketing in Colorado, but the state's motorists are willing to take more of a hit than others in the nation before changing their lifestyle, a survey shows.

The average street price of unleaded in Colorado at press time had reached $2.66, a jump of 14 cents in one month, and 31 cents more than a year ago at the same time. Fort Collins had the lowest price at $2.61. The rate was expected to climb higher, according to AAA Colorado. Factors cited include political instability in some oil producing regions, high crude oil prices, and high demand as the vacation season gets into full swing.

Originally published in the June 2018 issue of the O&A Marketing News.
Copyright 2018 by KAL Publications Inc.

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