A proposed law in Colorado could help prevent the extinction of Colorado’s approximately 1,650 independent beverage alcohol retailers. Since a law permitting wine sales in grocery stores went into effect March 1, 2023, about 120 independent beverage alcohol retailers have gone under and thousands of jobs have been lost. “Family-owned and multigenerational businesses are folding,” says Mat Dinsmore, owner of Wilbur’s Total Beverage in Fort Collins, Colorado and president of Colorado Independent Liquor Stores United. “In Colorado, 60% of beverage alcohol retailers are owned by either women or those whose second language is English. This is the last bastion of the American Dream.”
Total Beverage, a 40,000-square-foot beverage alcohol retailer in Thornton, Colorado announced on April 18 that it will close July 6. The Total Beverage in Westminster will remain open, but the Thornton store will be the largest beverage alcohol retailer in Colorado to close since grocery stores began selling wine. A significant number of independent beverage alcohol retailers in Colorado are also on credit hold. “That’s the kiss of death,” says Dinsmore, who also manages Wyatt’s Wet Good in Longmont. “Since COVID, wholesalers have more risk with retailers who are on the ropes. I have had great service and a great relationship with my wholesalers, but that hasn’t been the case for everyone.”
The proposed law—House Bill 1337—would prohibit spirits sales in grocery stores, force grocers to display alcoholic beverages in one location, eliminate predatory pricing, and remove the $2,000 cap on how much retailers can sell and deliver to restaurants. “It’s the first step to get things to a level playing field,” Dinsmore says. “We still have a long way to go.”
Josh Robinson, president of Argonaut Wine & Liquor in Denver, agrees the legislation is a starting point to saving Colorado’s independent beverage alcohol retailers. “HB 1337 is the only thing that is going to keep Colorado an independent market,” he says. “Without this legislation, all Colorado independent liquor stores have an expiration date. This bill would create a permanent separation between what grocers can do and what liquor stores can do in the market. If it passes there will be more positivity and investment into the retail tier than there has been in years.”
Proposition 125—which allowed Colorado grocery and convenience stores with a beer license to automatically sell wine last year—clearly broke a landmark 2016 agreement known as the Great Compromise, which allowed grocers to sell full-strength beer and raised the liquor license cap from one to 20 locations in phases over two decades. If grocers want a liquor license, they have to purchase one from an existing nearby store.
The two other referendums on the 2022 ballot—Propositions 124 and 126—were defeated. Proposition 124 would have slowly increased the number of liquor licenses a Colorado entity can hold to an unlimited number after 2037. Proposition 122 would have allowed third-party delivery of alcoholic beverages from companies like Grubhub and Uber. “In 2016, we agreed to have an on ramp for grocery stores to get into the business,” Dinsmore says. “It was the great lie. We put our best foot forward and tried to negotiate in good spirits. They came back and spent $32 million on those three initiatives versus $800,000 we raised. We beat two of them and lost one by six-tenths of a point.”
Before 2016, Colorado only permitted one liquor store per entity. Grocery and convenience stores could only sell 3.2% abv beer. Now independent retailers are fighting for their livelihoods. “Independent retailers win on service, selection, and price,” Dinsmore says. “We are losing with convenience. I am down 20 team members each at Wilbur’s and Wyatt’s. The chains have not hired people to offset the thousands of lost jobs. The grocers are not nearly picking up the volume of losses being sustained by independent retailers right now. It’s making it exponentially worse for the industry.”
Argonaut Wine & Liquor also laid off about 20 employees. “We have lost close to 40% of our wine business,” Robinson says, noting grocery stores only stock around the top 100 items. “In the grocery store there is the same watered-down selection. This means consumers aren’t getting as much access to small production or craft wineries.”
HB 1337 faces stiff opposition in particular from the Colorado Retail Council representing grocers and big-box stores. “We have quite a bit of opposition on this bill, but our legislators realize this is costing jobs, tax revenue, and landlords,” Dinsmore says. “The craft brewers support it because they aren’t getting access to the market.”
For Colorado’s independent retailers, the legislation appears to be their only lifeline. “If 1373 passes, there is a path forward,” Robinson says. “If not, Colorado will end up a grocery chain-only market.”
Dinsmore notes independent retailers in other states face similar threats from large retail chains. “It’s another play from the same playbook they are trying in other states—New York is one of them,” he says. “They’re not going to stop with beer or wine. They’re going to want spirits and then recreational cannabis. They’re going to want everything.”