Retail Sales Alcohol Beverages

Alcohol beverages - retail sales in sealed containers - fermented malt beverage retailers, retail liquor stores, liquor-licensed drugstores - distance restrictions - food sales requirements - delivery to customers - age to sell - public consumption - appropriation. Under preexisting law, effective January 1, 2019, the limitation on the maximum alcohol content of fermented malt beverages, also referred to as "3.2% beer", is eliminated, thereby allowing grocery stores, convenience stores, and any other person currently licensed or licensed in the future to sell fermented malt beverages for consumption on or off the licensed premises to sell fermented malt beverages containing more than 3.2% alcohol by weight or 4% alcohol by volume, referred to as "malt liquor".

The act modifies laws governing the retail sale of fermented malt beverages, which will be synonymous with malt liquor as of January 1, 2019, as follows:

• As of the effective date of the act, eliminates the fermented malt beverage retailer's license type that allows a retailer to sell malt liquor for consumption both on and off the licensed premises and prohibits renewal of existing on- and off-premises licenses on or after that date (sections 2 and 4);
• For fermented malt beverage retailer licenses authorizing the sale of malt liquor in sealed containers for off-premises consumption issued on or after January 1, 2019, the retailer:
• Must derive at least 20% of its gross annual sales revenues from the sale of food items, unless the retailer owns or leases premises in which malt liquor will be sold and has applied for or received, as of January 1, 2019, a building permit or certificate of occupancy for the premises;
• Cannot sell malt liquor to consumers at a price that is below the retailer's cost to purchase the malt liquor, with limited exceptions;
• Cannot allow customers to use a self-checkout mechanism to purchase malt liquor;
• May operate under a single or consolidated corporate entity but cannot commingle purchases for multiple licensed premises to secure a better wholesale price based on total product volume purchased; and
• May deliver fermented malt beverages to customers of legal age under the same conditions applicable to retail liquor store and liquor-licensed drugstore licensees as specified in sections 8 and 9 of the act (section 4);
• As of June 4, 2018, prohibits the state and local licensing authorities from:
• Issuing a new fermented malt beverage retailer's license authorizing the sale of malt liquor for off-premises consumption if the licensed premises is or will be located within 500 feet of a licensed retail liquor store, unless the retailer owns or leases premises in which malt liquor will be sold and has applied for or received, as of January 1, 2019, a building permit or certificate of occupancy for the premises; or
• Allowing a fermented malt beverage retailer to relocate its licensed premises if the new location is within 1,500 feet of a licensed retail liquor store; for a premises located in a municipality with a population of 10,000 or fewer, within 3,000 feet of a licensed retail liquor store; or for a premises located in a municipality with a population of 10,000 or fewer that is contiguous to the city and county of Denver, within 1,500 feet of a licensed retail liquor store (section 5);
• As of June 4, 2018, precludes issuance of a new fermented malt beverage retailer's license or the relocation of an existing fermented malt beverage retail licensed premises if the building in which malt liquor will be sold is located within 500 feet of a school, unless an exception applies or the local licensing authority or local governing body authorizes an exception within its jurisdiction (section 7);
• Prohibits the sale of malt liquor in a sealed container by a fermented malt beverage retailer on Christmas day (section 11); and
• Requires a licensed fermented malt beverage retailer to check the identification of its customers who attempt to purchase malt liquor to verify each customer is at least 21 years of age (section 11).

With regard to the retail sale of malt, vinous, or spirituous liquors by retail liquor stores or liquor-licensed drugstores, the act:

• Modifies requirements pertaining to the delivery of malt, vinous, or spirituous liquors by a retail liquor store or liquor-licensed drugstore to:
• Require the delivery to be made by a store employee who is at least 21 years of age and is using a store-owned or store-leased vehicle;
• Require the person delivering the product to verify that the person receiving the delivery is at least 21 years of age; and
• Limit total sales revenues from delivered alcohol beverage products to 50% of gross annual alcohol beverage sales (sections 8 and 9);
• Modifies provisions governing tastings conducted at a retail liquor store or liquor-licensed drugstore, including allowing tastings to be conducted:
• Between 11 a.m. and 9 p.m.;
• On up to 156 days per year; and
• By a representative of the alcohol beverage supplier (section 5);
• Specifies that if an employee or representative of an alcohol beverage supplier pours or serves the supplier's product during a tasting at a retail establishment, that service does not constitute labor provided by a supplier to a retail licensee (section 6);
• Applies the 1,500-foot radius restriction, rather than the 3,000-foot restriction, to a retail liquor store or liquor-licensed drugstore premises located in a municipality with a population of 10,000 or fewer that is contiguous to the city and county of Denver (sections 5, 8, and 9);
• Prohibits a retail liquor store from selling alcohol beverages to consumers at a price that is below the retailer's cost to purchase the alcohol beverages, with limited exceptions, and allows the same exceptions to the restriction on below-cost sales applicable to liquor-licensed drugstores under current law (sections 8 and 9);
• Allows retail liquor store and liquor-licensed drugstore licensees with multiple locations to operate under a single or consolidated corporate entity but prohibits commingled purchases for multiple licensed premises to secure a better wholesale price based on total product volume purchased (sections 8 and 9);
• Allows a liquor-licensed drugstore that applied for its license before October 1, 2016, to obtain additional liquor-licensed drugstore licenses, if obtained in the manner specified in current law for other liquor-licensed drugstores to obtain additional licenses, as follows: 4 additional licenses between January 1, 2019, and January 1, 2022, for a maximum of 5 total licenses; 7 additional licenses between January 1, 2022, and January 1, 2027, for a maximum of 8 total licenses; 12 additional licenses between January 1, 2027, and January 1, 2032, for a maximum of 13 total licenses; 19 additional licenses between January 1, 2032, and January 1, 2037, for a maximum of 20 total licenses; and an unlimited number of additional licenses on or after January 1, 2037 (section 9); and
• Allows employees who are at least 18 years of age but under 21 years of age to sell or otherwise handle, but not deliver, malt, vinous, or spirituous liquors at licensed retail liquor stores and liquor-licensed drugstores (section 11).

The act adds fermented malt beverages to the list of alcohol beverages that cannot be consumed in public and authorizes a local government entity or, for state parks or other property under its jurisdiction, the parks and wildlife commission, by rule, ordinance, or resolution, as applicable, to authorize public consumption of any type of alcohol beverage in public areas, other than a public right of way, within the government entity's jurisdiction (section 11).

Section 10 specifies that when imposing a suspension or fine against a licensed retail establishment for selling alcohol beverages to a minor or visibly intoxicated person, the state or local licensing authority cannot consider violations that occurred more than 5 years before the current violation.

$91,092 is appropriated from the liquor enforcement division and state licensing authority cash fund to the department of revenue to implement the act, with $10,656 reappropriated to the department of law to provide legal services to the department of revenue.

(Note: This summary applies to this bill as enacted.)