According to Jack Strauss, Miller Chair of Applied Economics at the Daniels College of Business, allowing Colorado grocery and convenience stores to sell full-strength beer and wine would create 22,000 jobs and save the average household $750 on beer and wine costs over three years.
Under current state law, large stores such as Safeway and King Soopers are only allowed to sell 3.2 percent beer, outside of one Colorado location per chain that is allowed to sell full-strength beer along with wine and liquor. However, a proposed 2016 ballot initiative is poised to change that, allowing grocery and convenience stores to sell full-strength beer and wine.
Opponents of this initiative fear that expanding Colorado’s liquor laws could be detrimental to craft brewers and neighborhood liquor stores.
They cite an economic study forecasting that passage of the measure would force as many as 700 liquor stores to close in just the first five years. That, in turn, could lead to as many as 10,000 lost jobs.
To better understand the debate, the University of Denver Magazine spoke with Strauss about his research on this topic.
Q: Will allowing grocery stores to sell a wider beer selection hurt Colorado’s craft beer industry?
A: Allowing craft beer in grocery stores will help because it will boost access to craft beers due to convenience—a major factor for determining consumer purchases. Relaxing restrictions would allow more than 100 brands of Colorado craft beer to be sold in local grocery stores. We estimate that improved access would generate an additional $125 million in craft beer sales, which would boost Colorado’s beer industry production significantly.
Q: What were other key findings in your report?
A: An economic impact and statistical analysis demonstrated that relaxing alcohol restrictions would lead to an 18 percent reduction of beer and wine prices. As a result of limited competition, Colorado consumers overpay for their beer and wine. Households could save $750 over the next three years if alcohol was sold in retail stores. This could boost Colorado employment by more than 20,000 jobs—from consumer cost savings and grocery store expansions.
Q: What are some of the objections from smaller craft brewers and liquor stores?
A: I believe that they fear change. A few of the smaller craft breweries object because they may not have as much access to large grocery stores. Stores such as King Soopers and Safeway will likely sell more popular craft beers from Colorado; however, lesser-known beers will still be sold by liquor stores.
Q: What surprised you the most about this research project?
A: I found it surprising that Colorado, particularly Denver, has so few grocery stores—which hurts consumers. States that allow alcohol to be sold in grocery stores have substantially more store locations for their residents. Additionally, a boost in craft beer sales in Colorado groceries could create approximately 900 new jobs through the multiplier effect.
Strauss’ report, “The Economic Impact of Allowing Alcohol in Retail Stores” may be found here.
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