Colorado C-Stores Gain Ground on Beer Sales

Measure gets further than previous similar legislation

Published in CSP Daily News

DENVER -- Colorado's convenience store owners have taken a step toward being able to sell full-strength beer, according to a report by The Denver Business Journal. The state House Business Affairs & Labor Committee approved a measure late Wednesday that would allow c-stores of under 5,000 feet to sell an alcoholic product bigger than the reduced-strength beer that they now are limited to offering.

The 7 to 4 vote came after other bills that would have expanded alcohol sales died two straight years in legislative committees, the report said.

Unlike its [image-nocss] predecessors, however, HB 1186, sponsored by State Representative Larry Liston, (R), does not give the same sales allowances to grocery stores, which are pushing a separate bill this year to allow them to buy liquor stores' licenses.

And it also limits c-stores to selling only full-strength beer rather than being able to offer wine or spirits to customers, said the report. Liston cited those two factors as having a big influence on a committee that rejected a bill to allow beer and wine sales at convenience and grocery stores last year by a similar margin, the newspaper said.

Committee members heard hours of testimony from craft brewers and liquor-store owners that allowing c-stores to tap into a product now available only at liquor stores will harm both of their industries and cost jobs during a recession.

But the five Republicans and two Democrats who supported the measure seemed more persuaded by c-store owners who said they have already had to lay off staff after beer sales dropped as much as 90% since July 2008. That was when state law was changed to allow liquor stores to open on Sundays, taking away the biggest day of sales for reduced-strength beer carriers who previously had no competition.

"I used to sell $1,000 to $1,500 a day in beer," Scott Paulson, owner of Silco Oil Co., which owns and operates 16 Colorado c-stores, told the paper. "Now I don't sell $1,500 in beer a month."

Paulson and others have been clamoring for nearly two years that they are at a competitive disadvantage because no one chooses to buy reduced-alcohol beer if they can go to a liquor store that operates the same hours and purchase a full product.

Wayne Matthews, president of the Rocky Mountain Franchise Owners Association for 7-Elevens, told the paper that because of the uneven playing field, he sold only five cases of beer even during Super Bowl Sunday this year.

But allowing chain stores like 7-Eleven and Circle K to get into the full-strength beer business when liquor store operators are limited to owning just one facility would put that group at a disadvantage, opponents of the bill said. Revenue would be shifted from Coloradans to out-of-state companies, speakers at a rally on the west steps of the Capitol noted.

Officials from the Colorado Brewers Guild also opposed the measure, said the report, saying that the sales lost by some liquor stores to c-stores would put those liquor stores out of business. And if locally owned liquor stores go out of business, the 114 Colorado-based craft breweries that they support with shelf space will find less places to sell their products, jeopardizing their existence as well, brewers said.

"If this bill becomes law, you may well be looking at one of Colorado's last brewers," Matt Cutter, founder of Upslope Brewing Co. of Boulder, told the paper.

Though the bill passed through the committee over the objections of four Democratic dissenters, it still has a tough road ahead, Liston said. It will have to go through another committee and the House before getting to the Senate, where President Brandon Shaffer (D), has said he opposes changing Colorado's alcohol laws.

But Friday's hearing, which took up more than six hours, marked that first step that similar bills have never been able to take, said the Journal.

"We have compromised slightly to take a good bill and make it better," Liston said.