A bill that would stop grocery stores from getting new licenses to sell hard liquor cleared its first committee vote Thursday at the state Capitol.

Senate Bill 33 passed the Senate Business, Labor and Technology committee with a 5-2 vote. It marks the second attempt by lawmakers to pass legislation aimed at protecting independent businesses reeling from the impacts of a 2022 ballot measure that allowed grocery stores to begin selling wine. 

“Liquor stores are crucial small businesses in any community,” said Sen. Dylan Roberts, D-Frisco, a prime sponsor of the bill. “They are owned by your neighbors and your friends and people that live in the community amongst yourselves, not by large corporations or companies that often don’t even headquarter in Colorado.” 

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Roberts signed onto a measure last legislative session that would have limited the sale of hard alcohol to just liquor retailers and established new restrictions on how grocers sell wine and beer. The bill passed the House but died in a Senate committee. 

This time, Roberts pitched the legislation as a “carefully crafted, narrowly focused bill” that keeps existing liquor licenses for grocery stores in place. 

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Approximately two dozen stores in Colorado currently operate liquor licenses, most of which are concentrated on the Front Range. A handful exist on the Western Slope, including the Costco in Gypsum which began selling hard liquor in 2018. 

Grocers have been able to apply for hard liquor licenses since a state bill passed in 2016 that allowed for the sale of full-strength beer while also slowly phasing in licenses for spirits. By stopping future expansion of high-percentage alcohol sales at box grocery stores, lawmakers hope to prevent local businesses from closing. 

Sen. Judy Amabile, D-Boulder, also a bill sponsor, said the “economic collapse of our independent liquor stores will devastate other industries” such as craft brewers and distillers, who rely on locally-owned businesses to stock their products. 

“And when this happens, Colorado will have little choice except to buy mass-produced, national-brand alcohol from large chains and big box stores at prices that they will then dictate due to the lack of competition,” Amabile said.

Lawmakers have also positioned the bill as a public safety matter, saying that the availability of hard liquor in grocery stores can be harmful for those struggling with substance use disorders. A Denver Post investigation last year found that Colorado has one of the highest drinking death rates in the country even as alcohol has become more widely available in the state. 

Liquor store owners, brewers and distillers who testified in support of the legislation said they have seen a decline in sales following the introduction of wine in grocery stores, which they say threatens businesses’ viability and local jobs. 

“The independent liquor store system is why we have a vibrant craft beverage industry in this state,” said Chris Carran, owner of Locals Liquors in Silverthorne and interim executive director for Colorado Independent Liquor Stores United. “The jobs and the economy from farm to table exist because of the independent liquor store.”

Opponents of the measure include grocery store chains Albertsons Safeway and King Soopers, which is owned by Kroger, as well as trade groups like the Distilled Spirits Council of the United States. 

The trade group’s vice president of public affairs and state policy, Ainsley Giglierano, called Senate Bill 33 a reintroduction of “prohibition-era laws to restrict the sale of spirits.” 

Spirit producers are disadvantaged in Colorado, where beer and wine are sold in more than double the amount of stores as distilled spirits, according to Giglierano. 

“Distillers continue to face a number of harsh economic challenges including the threat of tariffs, lack of market access, inflation and supply chain disruptions,” Giglierano said. “This bill attacks the spirit industry.” 

Opponents also argued that by ending new licenses for grocery stores to carry liquor, the bill stymies consumer choice. 

Two Republicans on the Senate committee, John Carson and Mark Baisley, both from Douglas County, voted against the proposal while Montrose Republican Marc Catlin joined all other Democrats in voting to advance it. 

The bill now heads to the Senate Appropriations committee, where it will need to pass before getting a full floor vote.