In killing a grocery store alcohol sales “cleanup” bill on Monday, some in the Capitol argue the Senate dismantled a “historic” compromise reached last year and renewed talks of a ballot drive.
On an 18-17 vote that split the parties, the Senate killed a bill to extend liquor licenses to stores such as Walmart and Target that have a pharmacy on premise that’s licensed to another company.
Senate Bill 143 also would have allowed a liquor-licensed drugstore that applied for a new license before October 2016 to gradually obtain multiple retail licenses.
Both issues were considered technical by sponsors and supporters of the bill. Larger retailers including Walmart and Target said passage of the bill was critical to participating in the grocery store liquor sales expansion agreed upon last year.
Walmart’s issue pertained to the licensure date change proposed in Senate Bill 143; Target required the fix on extending licenses to stores with a pharmacy regardless of ownership.
“We negotiated this bill very late in the session. But there were oversights, mistakes, things that were missed because it came together so late and moved so fast,” Johh Phair, a lobbyist for Walmart, said of last year’s compromise.
He said that while Walmart remains committed to a stakeholder solution in the legislature, the retailer will “explore all options … legal and electoral.”
Jeanne McEvoy, president and chief executive of the Colorado Licensed Beverage Association, who represents small liquor stores, said the cleanup bill is critical to preserving mom-and-pop shops.
Lawmakers last year allowed full-strength alcohol sales to be phased in at supermarkets over 20 years. Grocery stores are allowed to gradually purchase 20 licenses. After the program is phased in, stores are permitted to obtain unlimited licenses. Grocery store sales aren’t expected to begin until 2019.
The “grand compromise,” as it’s referred to at the Capitol, was reached with buy-in from a diverse group of stakeholders. Organizations normally at odds with each other came together, including smaller liquor stores, distillers, wholesalers, several craft brewers and distillers. A similar coalition is supporting Senate Bill 143 this year.
Passage of the measure last year encouraged supermarkets to back off plans to go to the ballot with a measure allowing full-strength sales in all grocery stores, rather than a gradual phase-in.
“Walmart will go to the ballot,” McEvoy said after the cleanup bill this year failed. “Walmart and King Soopers and Target and all of the box stores had a very gradual 20-year phase-in. The ballot isn’t a phase-in. The ballot is dropping the nuclear bomb on small liquor stores.”
Sponsors of the cleanup bill lamented over “untruths” that have plagued discussions as the debate turned into a referendum on big-box stores.
“It’s gotten quite muddled and confusing for some,” said Sen. Angela Williams, D-Denver, a sponsor of the bill.
She called last year’s alcohol compromise “a historic piece of legislation that attempted to update 80 years of liquor policy.”
The compromise last year also allowed retail liquor stores to sell non-alcohol products, limited to 20 percent of sales revenue.
Critics of the “cleanup” bill this year pushed an amendment that would have clarified that the 20 percent cap is limited to food. The move would have allowed small liquor-licensed drugstores to sell additional products before hitting the cap. The amendment first failed during initial floor debate, but was then resurrected.
Observers say the amendment served as a “poison pill,” which contributed to the bill’s defeat on Monday. The conversation revolved around concerns for smaller stores.
“The addition of full-liquor sales to Walmart is a substantive change that will be detrimental to small liquor stores, particularly in our rural areas,” said Sen. Irene Aguilar, D-Denver.
“The only thing that’s historic about this is it’s a historical giveaway and destruction of the liquor industry we have built in Colorado,” said Sen. Vicki Marble, R-Fort Collins.
McEvoy, however, says opposition to the cleanup bill was manipulated through a newly-created “front group” called Support Your Local Liquor Store.
The limited liability company was established in January, shortly after the start of the legislative session, according to filings with the secretary of state’s office. It is registered to Jason Hopfer, a lobbyist who is representing independent liquor stores like Applejack Wine and Spirits in Wheat Ridge.
Applejack was critical of the compromise bill last year, arguing that current law was sufficient. The store feared consequences like not being able to open additional locations.
Hopfer said there is nothing “fake” about his group’s representation, as some on the other side have alleged, noting that independent liquor stores came to him for representation.
“The more that they fail to represent actual independent liquor stores, the more interest that we get for membership,” Hopfer said. “They’d not like competition in who is representing liquor stores. Sorry for that, but too bad.”
He called any talk of going to the ballot a “hollow threat.”
Sen. Jack Tate, R-Centennial, said the discussion this year was never supposed to be about expanding stores.
“There was a mistake,” Tate said of last year’s legislation. “Maybe you feel it’s not your job to fix it, but that’s what this bill is about.”