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Posted: February 05, 2010

Beer-brewing Davids worry about retail Goliaths

For craft brewers, a legislative battle looms

Jay Dedrick

For Colorado craft brewers, the January gathering of state lawmakers at the Capitol has come to signal an annual battle to maintain their livelihood, not to mention the Centennial State's status as center of the beer universe.

Once again, state representatives have introduced legislation that would allow grocery and/or convenience stores to sell full-strength beer, not just the 3.2 product they currently stock. The past two years, such measures never made it past committee deliberation. What's different this year is that separate bills -- one representing grocery stores, the other convenience stores -- have been set into motion. Small breweries and mom-and-pop liquor stores fear the two-pronged approach might prove more difficult to fight than past efforts.

What's the problem? As a consumer, I sure would appreciate more retail availability of one of the state's finest resources. But the folks who brew the stuff don't like the idea. Never have.

And when they explain it, you understand why.

"One of the reasons the state has such a great beer culture is that, as a brewer, you have easy access to the retail decision makers who carry your beer," says Marty Jones of Denver's Wynkoop Brewery, Colorado‘s original brewpub. "To do that with a major grocery store chain is impossible. Small brewers like us won't have access to the shelves."

Jones almost always has a smile on his face, but as he speaks about this issue, his expression is serious, almost grim. Despite his having a glass of the Wynkoop's pumpkin ale in front of him. "For those of us who make a beer that's exotic ... this beer is not going to show up on the Safeway shelf. No offense to Safeway."

Bryan Baltzell of Great Divide Brewing in Denver also credits proximity and personal relationships with fostering the state's beer culture, and laments the potential loss.

"We can go down to Joe's Liquors, meet Joe, invite him to Great Divide and show him what a great product we make," Baltzell says. "The chain stores are more bottom-line driven. If we're not known to a chain store, if we don't advertise on the Super Bowl, we're not known. We're not welcome in their stores."

Fast-forward to a future Colorado where you can buy full-strength beer at grocery and convenience stores. Can you find Great Divide's Denver Pale Ale? Hopefully. How about Hoss, or some Hibernation for the holidays? Maybe. Maybe not. Picture the current shelf space reserved for 3.2 beer split up among the 100 brewers in Colorado ... not to mention all the out-of-staters.

So you could head back to Joe's, right? Well, not if enough beer drinkers settle for the selection at the nearby food store. Then, fewer people have been patronizing Joe's, and Joe has had enough.

"The concern is, not only will Joe's Liquors close, but the variety that is a proud staple of the Colorado beer market will begin to disappear as small stores close and large chain stores replace them," Baltzell says.

Is that the extent of the damage in Colorado? Probably not. For example, Great Divide buys malt from Colorado farmers, buys its glass bottles from a Colorado company, hires Colorado designer to design its labels. "You'd begin to whittle away at that," Baltzell says.

Colorado is in the minority among states when it comes to disallowing sales of full-strength beer at grocery and convenience stores. Jones heralds from the Southeast, where small brewers managed to make their way in a world where full-strength beer was sold at small, independent stores and large chain stores alike. So it's not as if he's shouting, "This could never work!" But the jarring implementation of a new retail reality is what he and his peers are working to avoid.

"To change it overnight would lead to severe hardships for some of the most important small businesses in the state -- at a time when holding onto a job is especially important," Jones says.

"For decades, the law has been set up where, if you own a liquor store, you can own only one. Overnight, we'd have large national and international chains with the ability to have dozens and dozens of liquor licenses. That doesn't seem at all fair to the people who made our industry possible."

In the weeks to come, you can expect Jones, Baltzell and their fellow members of the Colorado Brewers Guild to make their voices heard at the Capitol.

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Readers Respond

I disagree with the above. I think that the large chains eventually degrade the ability of small, local businesses to compete. There is not enough dollar power in the small biz. If the micro brewery belief is that they are in the best position now, why would we want to destroy that advantage? We have to support our neighbors and their interests. Especially if there is no disadvantage to us. Leave it alone. By eric Umenhofer on 2010 02 06
I'm a Colorado beer fanatic; however, I think that not allowing businesses to carry more than one retail liquor license is strictly anti-competitive. What about Trader Joe's (I love those stores!)? Why couldn't independents team together and open up a chain of Colorado stores, featuring cheeses, honeys and other organic products from our great state? Opening up the market to competition simply paves the road for more products, creativity and much wider variety for consumers. I think Jones, Baltzell and their fellow members of the Colorado Brewers Guild make a weak argument to claim that Colorado craft beer consumers will switch allegiance to cheap beer from St. Louis if Safeway, King Soopers and Albertsons are granted multiple liquor licenses. In truth, it’s more of a confidence and fear of competition issue. By Mark Van Vleet on 2010 02 05
I love craft beer. I love craft brewers. I like local liquor stores. But I don't understand why they should be protected from competition. Compare it to the bicycle market: Local bike shops find a way to compete with national, discounting chains. I'm sure life is tougher for them than it would be if the state mandated that high-quality bikes could only be sold in small shops. But they find a way to compete by connecting with customers. Is the beer market really so different? By Hank Schultz on 2010 02 05
I think that if liquor stores could sell snack foods, that could easily make up for the loss of beer sales to grocers; it might even increase their total sales significantly By steve krausz on 2010 02 05

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