Opponents of the Law have previously argued that if grocery stores are allowed to sell full-strength beer and alcohol, locally-owned liquor stores will be forced out of business and become smaller players in the marketplace. If these concerns became reality, craft breweries and distilleries would be faced with a new and far more difficult dynamic of competing for limited shelf space in grocery stores, and doing so through negotiations with larger out of state grocery chains rather than locally-owned liquor stores.
In an attempt to address these concerns, the Law has incorporated provisions to protect locally-owned liquor stores as well as craft breweries and distilleries. One protection limits the number of licenses that grocery stores and retailers are allowed to hold and requires these companies to acquire all liquor store licenses within 1,500 feet (3,000 feet in jurisdictions with less than 10,000 people). The idea is to protect locally-owned liquor stores which are in the same shopping center as a grocery store. Another protection limits the number of liquor licenses a grocery store can acquire over a 20 year period; this phase in is another attempt to limit the negative impact on locally-owned liquor stores. Lastly, the Law requires grocery stores and retailers to designate a manager on site to handle purchasing. While a local purchasing manager could theoretically make the negotiation process easier for craft brewers and distillers, there is no requirement for the grocery store or retailer to buy Colorado products.
Explaining that the status quo was preferable but unlikely to remain, Governor Hickenlooper signed the new Law because it provides options for consumers and reasonable protections for small business – especially when compared to the multiple ballot initiatives that would immediately allow full-strength beer sales in grocery stores. Time will tell whether consumers are happy with their new options and whether small businesses realize the protections described in the Law.
For more information about how the law will impact your business, contact Billy Jones.