On Wednesday, Colorado grocers launched an effort to change the law to let grocery stores sell full-strength beer and wine. They will be gathering signatures to get a measure to that effect on the 2016 ballot.
The idea has a certain appeal to it. After all, one could just grab a bottle of wine while shopping for the rest of dinner and be done.
Except that convenience comes at a high price. Allowing grocery stores to sell beverages now reserved for liquor stores would cost Colorado hundreds of jobs while damaging its wine and craft beer industries.
Consumers would lose as well, with fewer choices. The big chains deal in volume, not variety, and tend to focus on a handful of big sellers rather than the best selection.
Only the big grocery stores would win. And their profits go out of state.
As things stand now, retailers selling alcoholic beverages can have only one liquor license. That effectively bars chain stores and it means that liquor stores are independently owned.
Also, grocery stores in Colorado now sell only beer containing 3.2 percent alcohol. Full-strength beer can be as much as 6 percent. “Three-two” beer dates to a time when Colorado allowed 18-year-olds to buy and consume it. As such its regulatory regime is entirely separate.
Of course, what the grocery chains are touting is convenience. What they are not talking about – yet – is what happens if they succeed in enacting this change.
Colorado law requires retailers to buy alcoholic beverages only from licensed Colorado wholesalers. That means a wholesale business in the state with warehouse jobs, truck drivers, a Colorado sales force, clerical workers and all the other trappings of a successful business.
But when Kroger, Safeway and Albertsons get involved they push to be able to buy directly from the producers, claiming that change will lower prices. And it does – for them.
What happens then is that someone in the Kroger corporate headquarters in Cincinnati talks to someone from Gallo in California and the only involvement Colorado has is that the trucks use our roads. Left out are the wholesalers and their Colorado jobs.
Left out, too, would be this state’s fledgling wine producers. Like most small businesses, they lack the economies of scale to compete on price with the industry giants, most of which are in California.
Colorado’s craft-beer industry would be hurt as well. Its members rightly fear the effects of corporate bureaucracy on their ability to introduce new products and respond quickly to their markets. The big chains may have a shelf or two devoted to Colorado beers, but as with wine, their structure simply does not fit with small local producers. And unlike an independent liquor store, they have no institutional interest in promoting local products.
And for all that consumers would get little benefit. Although central to the big chains’ sales pitch, the convenience factor is minimal. Every grocery store in Durango already has a liquor store next door or across the parking lot.
Changing Colorado law to benefit a few big grocery stores would benefit only those chains. And it would do so to the detriment of Colorado businesses and Colorado consumers. Say “no” to the grocers’ plan.
