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Colorado mixed on alcohol measures with wine sold at grocery stores too close to call

Measures that would have dramatically changed the way Coloradans buy alcohol were failing Tuesday night, even with $30 million in campaign donations
(Durango Herald file)

Coloradans raised their glass to a batch of alcohol-fueled measures on Tuesday — but not in favor of passing all of them.

Voters rejected Proposition 124, putting a halt to any plans by large out-of-state liquor-store chains who were eyeing Colorado for a quick expansion. Proposition 126, which would have allowed third-party services like Instacart and DoorDash to deliver alcohol to customers, was heading toward defeat. It was failing by 6 percentage points at 12:30 a.m. Wednesday.

The apparent defeat of the two measures was a major win for opponents, which included many neighborhood liquor stores. Opponents were outspent in their campaign fundraising 30-to-1.

“In recent weeks, we felt that even though this was David versus Goliath because (proponents) had raised over $30 million, our message was starting to resonate,” said Chris Fine, executive director of the Colorado Licensed Beverage Association, which represents small liquor retailers and opposed all three. “People were realizing that these were billion-dollar companies putting mom and pops out of business.”

John Brackney, former chief executive of the South Metro Denver Chamber of Commerce, stands at a King Soopers in Denver in October 2015 to make the case for a ballot proposal that would allow all grocery stores to sell full-strength beer and wine. (Durango Herald file)

But too close to call was Proposition 125, which would let grocery and convenience stores sell wine starting next year. At 12:30 a.m. on Wednesday, the measure was failing by less than 1 percentage point.

If Proposition 125 passes, retailers with a beer-selling license could start selling wine on March 1, 2023. That’s approximately 1,819 licensees as of June 2021, according to the Department of Revenue. They’ll also be able to offer beer and wine tastings.

It’s been nearly three years since grocery stores began selling full-strength beer, made possible by a law passed by the legislature in 2018. Touted as a convenience to customers, it’s been a battle for small liquor stores that have managed to survive the past three years.

In 2019, the first year supermarkets could sell beer, there was an immediate jump in the number of grocery stores getting a license. Between 2017 and 2021, licenses to grocery and convenience stores increased 17.3%, according to the Colorado Department of Revenue. The number of licensed liquor stores, meanwhile, barely budged, even dropping by a few in the same period.

At Fisher’s Liquor Barn in Grand Junction, owner Brandi Pollock said her store lost 25% of its business because shoppers picked up more beer at grocery or convenience stores. The bone given to liquor stores was that they could sell food. That’s not why she’s in the liquor business, she said.

She believes her store fared better than others because it had a larger selection of wine, and as a local owner, she cultivates those relationships and is eager to nurture local wineries, brewers and other beverage makers by getting their products on her shelves if she likes the taste. It’s more difficult for local startups to get the attention of a corporate grocery store chain.

“All the stores around Colorado did a good job educating our customers about it,” Pollock said. “I am so excited that our customers, our friends and family listened to our concerns.”

The other measures still affect local liquor stores but in different ways. Proposition 124 would have immediately let a liquor retailer operate eight locations, from the current three, and then have an unlimited number operating by 2037. Because it failed, Colorado’s existing law still allows expansion but much slower and not by much. Liquor stores can add up to four locations in 2027.

The 124 measure was primarily funded by Total Wine & More, which has three locations in the Denver area. The liquor store chain, which started as a single store in Delaware in 1991, now has at least 244 stores in 27 states today, according to its website. It also donated $12 million of the $14.5 million raised by Coloradans for Consumer Choice and Fairness, which supported the liquor license initiative.

Tanner Stogsdill, a Democrat who recently moved to Denver from Texas, voted against Proposition 124. He said big box retail wine stores like Spec’s Wine and Total Wine dominated the Texas market. Stogsdill, a loyal customer to several small mom-and-pop Denver liquor stores, said he appreciates the small-town feel at those stores, where local employees are friendly and attentive.

Restaurant cocktails to-go ends July 2025

Meanwhile, Proposition 126 puts the kibosh on alcohol delivery by third parties like DoorDash and Instacart. While proponents had hoped the allowance of third parties would help small liquor stores add the service if they couldn’t spare employees for delivery jobs, liquor stores can currently deliver alcohol under existing statute. They just have to use their own staff and store vehicles.

Because 126 failed, restaurants will end alcohol service to-go in July 2025. The temporary allowance during the pandemic was intended to help restaurants survive the COVID-19 closures and disruptions.

That was a blow to the Colorado Restaurant Association, which in a July survey found that 75% of its members would opt for third-party delivery.

“We are stunned and disappointed that Colorado voters did not appear to support their local restaurants through Proposition 126,” said Sonia Riggs, president and CEO of the association. “It’s widely known that restaurants have been one of the most devastated industries over the past two years and it’s disheartening to see that voters are not willing to support these businesses in serving their guests in a responsible way. Without Proposition 126, alcohol to go is set to expire in summer 2025, and that crucial revenue lifeline will be stripped from restaurants when they need it most. It will impact customer service, revenue, and the convenience that consumers have come to expect.”

Daniel Ramirez, co-CEO of Los Dos Potrillos, a Denver-area Mexican restaurant, said his small chain doesn’t offer delivery and had hoped that if 126 passed, they would modify their menu to offer small bites and alcohol to go. The restaurant is also opening two more locations next year, including a fast-casual restaurant in Northglenn with a drive-through pickup window.

“We just keep moving in the right direction, like we did in COVID,” Ramirez said. “You can’t win everything.”

But restaurant owner Bob Starekow said to-go cocktails really didn’t catch on for his restaurants Silverheels Bar & Grill and Kemosabe Sushi & Sake in Frisco. He doesn’t feel strongly about the measure, but has his own concerns.

“I had my own worries about people taking advantage of it once you’ve left the premises,” he said. “I’m not particularly partial to packing up cocktails and dealing with the issues of selling more drinks and making sure people aren’t hopping into their car and popping a straw and driving 30 miles in rural areas, where we are.”

$30 million down the drain

Supporters of the three alcohol measures outraised their opponents more than 30-to-1, according to an analysis by The Colorado Sun. As of Monday, proponents had raised nearly $30 million.

Wine in Grocery Stores supported the other two initiatives and received $4.8 million from Instacart, $3.8 million from DoorDash and $1.7 million from Whole Foods.

Keep Colorado Local, which opposed the three initiatives, spent nearly $760,000 through Oct. 26, while raising $932,000 through Nov. 5.

Fine, with the Colorado Licensed Beverage Association, said that many of the 1,600 stores that his organization represents are people of color and speak English as their second language. Fifty percent are owned by women. The diversity within ownership and their outreach to the small startups and local beverage makers in their communities is what Colorado is known for.

“As a state, we really pride ourselves on having this great, vibrant alcohol market with the craft brewers and the craft distillers and the wineries along the Western Slope,” Fine said. “What I want to stress are those small businesses outside of the retail liquor stores. The small brewers, the craft distillers, the wineries. They depend on the local liquor store to get their wines out there. They’re not depending on Kroger.”

Colorado Sun reporter Tatiana Flowers and Sun correspondent Sandra Fish contributed to this report.