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DENVER, CO - JUNE 22: The staff from The Harvest Wine Co meet in the back yard of owners Nate Klatt and Erin Singrin to taste wines from the Sonoma Coast on June 22, 2020 in Denver, Colorado. The group gathered to taste new, Pinot Noir, Syrah, and Chardonnay wines they are considering for inclusion in the company's portfolio. (Photo By Kathryn Scott)

Coloradans have been able to buy full-strength beer at all grocery and convenience stores since 2019, three years after the state legislature passed a law that changed how retail alcohol sales are regulated for the first time since the end of Prohibition. 

Now, it’s wine’s turn.

Proposition 125 would allow grocers and convenience stores licensed for beer sales — aka “fermented malt beverage retailers” — to also sell wine, sake, cider, mead and other vinous liquor starting next year. 

Here’s what you need to know about Proposition 125:

What it would do

Proposition 125 would change Colorado law to allow retailers with a license to sell beer to 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. 

And several other rules still apply: No self-checkout, no selling beer or wine below cost and no moving a license to a new permanent store location if it’s too close to another licensed store.

A sample of the 3.2 beer selection at a Safeway in Denver before a new law took effect on Jan. 1, 2019, allowing grocery stores to sell full-strength beer. (John Frank, The Colorado Sun)

The measure wouldn’t change any other existing alcohol-sales rules, such as the prohibition of sales between midnight and 8 a.m., and on alcohol sales to anyone under 21. 

According to the Department of Revenue, Proposition 125 would cost the state $5,000 for a one-time update to its computer program. Passage of the measure would also authorize the state licensing authority to set fees for a wine and beer retail license.

The arguments for

Consumer convenience is the main reason proponents of Proposition 125 cite for why grocery stores and other licensed retailers should be allowed to sell wine. 

Consumer thirst for beer increased 8.1% in 2019, the first year grocery stores were allowed to sell full-strength beer. According to data from the Department of Revenue, the state’s beer manufacturers and wholesalers sold 124.5 million gallons, up nearly 10 million gallons from the prior year. 

But that growth rate didn’t last. The volume of beer sold fell 1.9% in 2020, the first year of the pandemic. Beer sales picked up again last year, growing 4% in 2021.

While the number of beer retailers grew 13.8% between 2018 and 2021, the number of licensed liquor stores in Colorado has been flat since 2018, when Senate Bill 243 authorized grocery stores and other retailers to sell full-strength beer instead of just 3.2%.

That’s a figure advocates of Proposition 125 are using. When grocery stores began selling beer, Colorado didn’t see a heavy loss in liquor stores.

“The Colorado experience of modernizing our state’s beer laws worked out well for everyone,” Michelle Lyng, spokeswoman for the Wine in Grocery Stores/Yes on 125 and 126 campaign, said in an email. “Grocery stores sell full-strength beer, there’s the same number of liquor stores today as before, and shoppers can choose between the convenience of a grocery store and the selection of a liquor store. It’s been proven there’s room for everyone to flourish.”

The arguments against

Small liquor stores will lose business if Proposition 125 passes, opponents of the measure say. They already felt the pain when grocers and convenience stores were allowed to sell full-strength beer. 

At Fisher’s Liquor Barn in Grand Junction, owner Brandi Pollock said her store lost 25% of its business as shoppers picked up more beer at grocery or convenience stores. She believes her store fared better than others because it had a larger selection of wine. She’s tried to expand where possible, but there’s only so much she can do. 

Beer and wine make up about 60% of her sales, with liquor at 30%. Tobacco, accessories and food make up the rest.

Long-time Denver proprietor Argonaut Wine & Liquor on Colfax continues to feel the impact of grocery stores adding beer, said David Bentley, assistant general manager. Argonaut used to be one of the top sellers in the state of Odell Brewing Co. products, he said. Now, it’s in the top 50. 

Customers leave Argonaut Wine & Liquor in Denver’s Capitol Hill neighborhood loaded down with alcohol on March 23, 2020. (Eric Lubbers, The Colorado Sun)

“It definitely hurt business when beer went into grocery stores,” Bentley said. “Convenience is king, I guess.”

Argonaut is grateful for loyal customers and it prides itself on stocking obscure brands and local brews. It’s a store where a small company can walk into Bentley’s office, let him have a taste and if he likes it, he’ll add it to the store where his staff knows what they’re drinking.

“I have 100 employees. When you come into Argonaut, you can actually talk to someone and get recommendations, compared to going to a grocery store where nobody can really help you,” Bentley said. “When people vote on this stuff, they don’t really think about how it’s going to impact a 55-year-old business that’s been part of the community.”

If Proposition 125 passes, the number of stores selling wine will more than double because of the automatic license conversion to beer and wine sales. 

One big thing you should know

Grocery stores that have pharmacies, which the state calls liquor-licensed drugstores, are already on track to be allowed to sell wine and spirits in the coming years under Senate Bill 243. 

Retailers would be allowed to sell all types of alcohol at 13 of their stores starting in 2027, and then at 20 stores starting in 2032. The cap goes away in 2037, at which point liquor-licensed drugstores will be able to sell all types of alcohol at all of their locations. 

Also, Proposition 125 isn’t the only measure that would change Colorado’s alcohol laws on the November ballot. 

Proposition 124 would let liquor retailers open more locations in the state.

Proposition 126 would let third-party services deliver alcohol and join licensed stores and restaurants, which are the only ones authorized to deliver to customers currently. It would also allow restaurants to sell to-go alcohol in perpetuity, where now they can only do so until July 2025.

The players and the money

More than $11.3 million has been raised by Wine in Grocery Stores, the committee pushing for the passage of Propositions 125 and 126. 

The group has received funding from large grocery chains like Albertsons Safeway, Whole Foods Market and Kroger, which owns King Soopers. Convenience store chains like 7-Eleven and Circle K are also funding the effort to pass Proposition 125.

The group also received money from Instacart and DoorDash, which support Proposition 126.

Most of the committee’s spending is going toward advertising in support of Propositions 125 and 126.

Keeping Colorado Local, an issue committee run by independent liquor stores fighting Propositions 124, 125 and 126, has raised about $500,000.

Colorado Sun staff writer Jesse Paul contributed to this story.

Tamara Chuang

Tamara writes about businesses, technology and the local economy for The Colorado Sun. She also writes the "What's Working" column, available as a free newsletter at coloradosun.com/getww....