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Grocers, Convenience Stores Now Sell Full-strength Beer

January 5, 2019
Sanjay Shrestha, owner of Boulder Gas on 28th Street in Boulder, is excited about the opportunity to sell full-strength beer at his station.

Major changes in Colorado liquor laws went into effect Tuesday, and with them will come a shift in the beer-buying landscape. Grocery and convenience stores that previously sold 3.2 percent beer (the low alcohol brew by weight) now are able to sell full-strength beer.

The change is a creating a mix of excitement and fear among many business owners in the region.

Broomfield liquor store owner Dennis Pemberton, who has owned High 5 Liquor near West 120th Avenue and Sheridan Boulevard for nearly eight years, said that four days in and he hasn’t seen an impact — yet.

The last time he checked, the King Soopers store next door had only partially-filled shelves. Craft beer, supplied by a large liquor distributors, is the only section that appears full, Pemberton said, but shelves intended for Budweiser and Coors are sparse.

“It’s become a logistical nightmare for beer distributors to get it into stores,” Pemberton said, based on what he has heard from his own distributors. “Basically there’s not enough people and not enough product to get it into stores.”

To combat the impact he expects to see, Pemberton said he’ll watch weekly advertisements, try to match prices across the board, and keep shelves as fully stocked as possible.

“We hear a lot of disenchantment,” he said. Customers say “we hope this doesn’t destroy your business — we enjoy shopping in your store.”

He believes the store’s customer service and staff’s knowledge about the product will help. Pemberton also counts on business from people who want the convenience of getting beer, wine and liquor in one place.

New Boulder Gas station owner Sanjay Shrestha is happy he will be able to offer full-strength beer to his customers.

Shrestha said he is considering getting a license to sell beer. “We’re selling cigarettes, why not beer?” he said. “It’s a good business decision. We’ll have to reorganize the shelves and buy new refrigerators.”

He may have to invest anywhere from $5,000 to $10,000, he said. But it’s worth it, said Shreshta, who bought the store at 2995 28th St. in 2016. The previous owner didn’t sell beer, so Shrestha didn’t think about it until he heard about the changes in the law.

But Alex Kang, owner of A-OK Liquor, located not far from Shrestha’s gas station, is worried. He said he might lose as much as 10 percent of his sales to local convenience stores and grocery chains that begin selling full-strength beer. “About 55 percent to 60 percent of my sales are from beer,” he said.

Still others are waiting for the dust to settle. “We’re getting ready to look into it, and haven’t done a whole lot of research yet,” said Lauren Blake, who works at Buffalo Gas, 5500 Arapahoe Ave. in Boulder.

The liquor law changes are part of a larger regulatory transformation approved by the state Legislature in 2016 and 2018. The new laws affect — in addition to the manufacturing, selling and purchasing of beer — “deliveries, cost of goods sold, the age of employees, purchasing and distribution practices, license types, ownership, tasting, distance restrictions, and public consumption,” according to a news release from the Colorado State Department of Revenue.

“These new regulations are some of the largest sweeping changes to the state’s liquor laws since prohibition,” Patrick Maroney, liquor enforcement division director, stated in the release.

Stores that have a current 3.2 beer license do not have to apply for a new license, but new retailers will have to apply for a new fermented malt beverage license, said Suzanne Karrer, communications manager for the enforcement business group of the Colorado Department of Revenue.

Karrer added that store owners keen to jump on the bandwagon need to make sure their businesses are not located within 500 feet of an existing retail liquor store, according to the new law. It also requires new retailers interested in selling beer make at least 20 percent of their gross total sales from the sale of food items.

Also, grocery and convenience stores, if they sell at least 50 percent of their alcohol from a physical store, will be allowed to deliver beer to customers using company vehicles driven by company employees.

The new law also brings down the age of clerks selling full-strength beer, wine or liquor from 21 to 18 years old.

Grocery stores with pharmacies (licensed prior to 2016) are allowed to sell full-strength beer, wine and spirits at five locations through 2021. The cap on locations is set to loosen incrementally every five years through 2037.

Big grocery chains are perhaps the biggest beneficiaries of the change.

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