There’s been a lot of to-do lately about Colorado’s newly proposed House Bill 1192 that would allow chain liquor sales in the state. Specifically, outlets such as King Soopers and Safeway would be allowed to carry full-strength beer. My guess is this will also open the door for Trader Joes to enter the state (though I’ve never had occasion to shop there myself).
Opponents of 1192 are numerous. Local Colorado breweries – members of the Colorado Brewers Guild – have setup an informational page of sorts outlining several of the arguments against the bill. Specifically, their argument is that increased competition by chain liquor stores will put mom-and-pop liquor stores out of business. Once they go, so do the craft beer sales – chains like the Kroger franchise admittedly care little about the fortunes of Avery or Tommyknocker*.
My problem with this argument is twofold.
First, I oppose restriction of alcohol sales on ideological grounds. A blue law is a blue law. And make no bones about it – not allowing a grocery store to sell liquor is a hold-over from the bad old days. By not allowing chain liquor sales, the government is in the business of interfering with market mechanisms at best, and of legislating morality at worst.
Secondly, and just as important, I don’t believe the law will hurt craft brewing in Colorado nearly as much as its opponents say it will. California, Oregon, and Washington all allow grocery stores to sell full-strength beer and all three states have extremely vibrant craft brewing industries (More Russian River in Colorado, por favor!). That is to say, Colorado has a vibrant craft brewing industry in spite of our blue laws, not because of them.
Assume that chain liquor sales are allowed. Without a doubt, many small liquor stores will close. But this doesn’t imply that all liquor stores will. In fact, shops like Argonaut or Applejack will likely see more business once the competition is driven out (i.e. they split the difference in new customers with the grocery stores). And the argument that we somehow have to save the mom-and-pop liquor shops is a non-starter – at least on an economics blog.
Moreover, many smaller liquor stores aren’t selling much craft beer anyway. While I see a few of the larger Colorado breweries’ wares on sale at the shop near my house, I have to go to the larger store down the street to get the more obscure brew.
The point is that I haven’t seen much data to suggest what the impact of HB1192 is going to be. One might even argue that by allowing more stores to sell liquor we see a sort of Starbucks Effect, thus growing the market for beer overall. But, while I sit here sipping my Avery IPA, worrying about what strange bug is infecting my latest batch of homebrew and contemplating the possible consequences of greater market freedom, I don’t buy for one second the idea that this is going to kill Colorado craft beer.
*I was going to link to Ska Brewing, but for God’s sake, everyone knows the first rule of internet design is don’t do your whole damn site in flash!!!
Beer, Politics, Rants, economics Beer, colorado, economics
