Cheers: The death of 3.2 beer at grocery stores bringing craft brews to shelves

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AURORA | The long, long wait is over. No more near-beer or water-beer at the grocery store or an extra trip on the way home for the real thing.

Real beer at the store is here.

A statewide liquor law went into effect this week liberating grocery store chains and gas stations to replace 3.2 percent beer with real beer and limited liquor.

The law is viewed as a compromise between grocery giants such as King Soopers, Safeway, and Walmart and smaller would-be competitors like liquor stores and craft brewing operations concerned that sales at big retailers will hurt business.

In 2016, state lawmakers passed SB-197, avoiding a showdown a the ballot box between grocery giants, who knew they had customer convenience on their side, and the fate of thousands of mom-and-pop liquor stores across the state.

The measure phased out old laws restricting grocery and convenience stores to selling 3.2 beer, but ensure that liquor and wine sales remain only in dedicated liquor stores.

Starting Jan. 1, the law allows for fully-alcoholic beer on shelves. Each grocery chain can also launch up to eight liquor stores by 2022 and an unlimited number after 2037.

The changes sound the death rattle of the watery 3.2 percent alcohol-by-weight beer brewed specifically for grocery chains in Colorado and other states, said Kevin DeLange, co-founder of iconic Aurora brewery Dry Dock Brewing.

“There are mixed feelings on liquor stores versus grocery stores (selling beer),” DeLange said. “But I don’t think anybody has mixed feelings on 3.2 beer being replaced by full-strength beer.”

Even so, he said changes in the beer industry are afoot.

“It’s going to change Colorado’s liquor laws the most since Prohibition,” he said of the law. “It’s going to be crazy.”

At King Soopers, 5 and 6 percent alcohol beers will replace 3.2 percent suds, said spokesperson Adam Williamson. Each store will have a different variety of locally- and nationally-produced beer.

Under the new law, grocery stores can sell traditionally higher-strength beers as well, such as stouts.

Light beer lovers need not despair: 3.2-percent beer is actually nearer to 4-percent strength, and King Soopers will stock several “session” beers naturally nearing that range, Williamson said.

The effective changes worry DeLange. He said his brand will be shelved at many grocery stores, but small breweries with limited distribution staff could be squeezed out by bigger operations.

In addition, ever-warring grocery store chains, famous for weekly “loss-leaders” could take a big bite of liquor store sales by undercutting prices, liquor store owners say.

Lee Earnhart, who owns Chambers Wine and Liquor in Aurora, said he was optimistic that his store will weather the changes.

“We’ve been here for 37 years, and we’ll be around for more,” he said. “The larger stores like mine will be able to survive by changing a bit of our business plan, but people really want variety.”

“I have 18,000 square-feet of space for wine, liquor and beer,” Earnhart added. “It’s going to affect the small store really bad.”

Jim Nogami manages the small Grapevine Wine and Liquors store near the intersection of  Monaco Parkway and Kentucky Avenue, just across the street from a King Soopers.

That particular King Soopers location has not applied for a liquor license, said Williamson, the spokesperson, but Nogami said he’s uncertain whether his store will lose customers.

“There’s no question that the law will have an effect on liquor stores,” he said. “The question becomes how much of an effect it will really have.”

Colorado has been debating beer in grocery stores for more than a quarter-century. Voters in 1982 overwhelmingly rejected a ballot measure to allow full-strength beer in grocery stores. Since then, beer law has become a perennial topic of debate in the state Capitol.

Lawmakers tried and failed several times in recent years to craft rules that would allow grocers to sell full-strength beer and wine, but succeeded in 2016.

Gov. John Hickenlooper, a former craft beer entrepreneur, signed the bill into law in 2016 and tried to prevent a retailer-led ballot initiative to sell wine and beer at all stores.

Grocery stores campaigned to slash the ban on the sale of full-strength libations outside of liquor stores through a ballot initiative, but dropped the campaign after Gov. Hickenlooper signed the bill.

It’s not out of the question that King Soopers will continue the long fight to also sell wine and liquor at all stores. Williamson said King Soopers would follow feedback from customers who want the convenience of grocery and wine, beer and liquor sales under one roof.

“As they ask for that, we’ll follow those wants and needs,” he said.