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Grocers, liquor stores slug it out

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A month into the biggest change in liquor laws that Colorado has seen since the end of Prohibition, retailers and craft brewers still are trying to sort out what it all means. Legislation that was passed in 2016 and took effect Jan. 1 allowed grocery and convenience stores across the state to sell full-strength beer for the first time, repealing their 3.2 percent alcohol requirement for beer sales. Proponents argued the change would mean more convenience for shoppers and would bring Colorado in line with many other states, while opponents predicted peril for the small, low-margin “mom and pop” liquor retailers that have located near supermarkets as well as craft brewers who could lose shelf space for their products if those stores were forced to close. So far, the marketplace still seems to be sorting itself out in terms of pricing and customer preference, but that doesn’t mean the impact isn’t being felt. “Everything is so new, it’s hard to measure what the true effect is,” said Matt Dinsmore, managing partner at Wilbur’s Total Beverage in Fort Collins, “but the only people this is good for are the major chains. There’s not a single owner it’s not affecting.” Colorado’s booming craft-brewing industry also still is assessing the impact. “From my conversations with brewers, they have mixed feelings based on their size, market position, and their ability to earn grocery-store chain placements,” said Bart Watson, chief economist at the Boulder-based Brewers Association. Liquor stores worried that grocery chains might undercut them on price on both major brands and local brews, but Watson said “I haven’t seen any aggregated price data yet comparing the two channels.” Reports of below-cost selling by grocers when the new law took effect prompted BizWest to survey supermarkets and larger liquor retailers in mid-January in several cities in the Boulder Valley and Northern Colorado. However, the survey found little if any difference between what supermarkets and liquor stores were charging for several popular beers produced in the region: Fat Tire from Fort Collins-based New Belgium Brewing Co.; Dale’s Pale Ale from Longmont-based Oskar Blues Brewery; 90 Shilling Ale from Odell Brewing Co. in Fort Collins; Milk Stout Nitro from Longmont-based Left Hand Brewing; Buffalo Gold from Boulder Beer; and Boulder-based Upslope Brewing Co.’s India Pale Ale. That’s why most liquor retailers are more concerned with shopper habits based on convenience than on price competition. “Lots of people don’t drink, but everybody eats,” said Jim Dean, a co-owner of Hazel’s Beverage World in Boulder. Even though a grocer might have fewer beers on the shelves than a liquor store has, he added, that might not matter. “If you’ve got that lady going to the grocery store and she’s standing there and looking at the beer and her significant other says, ‘I want Crooked Stave’ but she doesn’t see it, she just sees Shock Top, then guess what? That guy’s getting Shock Top.” Still, liquor retailers say they will compete by touting the number and variety of beers they […]

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