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Rayburn: Time to trust more in free enterprise

May 14, 2016 Updated: May 16, 2016 at 1:14 pm
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Ted Rayburn 11/19/15. Photo by Mark Reis, The Gazette

On the surface, it seems remarkable that the clearest development to come out of this year's Colorado General Assembly session is the loosening of constraints on who can sell alcoholic beverages.

After all, lawmakers also wrestled with control of taxpayers' money, infrastructure needs, voting rights and the environment, all big, serious issues, but they could not move the needle on any of them. Was the decision to gradually allow grocery chains to obtain liquor licenses that simple? No. But it looks like the actual decision on this is not in the hands of legislators.

Senate Bill 197 is in fact an attempt to slow a train that is only gathering steam. The bill seeks to require that grocers get those licenses over a period of time, and only if they buy out nearby liquor stores. But a referendum headed for the Nov. 8 ballot would allow grocers unlimited licenses and leave it to liquor merchants whether to compete with them.

If voters pass that referendum, it would render SB 197 moot, even if Gov. John Hickenlooper signs it into law. Legislators want to cushion the blow for the state's liquor store owners and craft beer makers - understandable, given the many good jobs they have created over the years. However, I have a hard time understanding how a government entity can force a business to buy out a potential competitor. In fact, it is usually government that is trying to prevent buyouts as a way to promote competition.

If you are a King Soopers or Safeway or any successful grocery store, wouldn't you want the ability to choose your own inventory? Under the bill, will grocers be forced to honor existing agreements between the liquor stores they purchase and distributors, even the leases on their stores? That could be an onerous condition, depending on previous business decisions that are out of the grocers' control.

I can't help but think about the history of Walmart's expansion to seemingly every town and city across the country over the past 40-plus years, and the resulting outcry from many residents of those towns, as the new department store proceeded to offer lower prices for goods than the small, local businesses. Sadly, many of those small stores went out of business.

But would it be fair to say for a mayor or town council to say to the incoming department store, "No, you are not allowed here." That seems out of step with American free enterprise. I know that, over the years, some municipalities have taken steps to keep Walmart and perhaps other big-box retailers out, with limited success. And the reason that it is so difficult is this:

Consumers want them.

Walmart or any big retailer succeeds because enough consumers in their area choose to buy their goods. Townspeople "vote" to let them stay by spending in their stores, and if they want them to leave, they can stop shopping there and begin to support locally grown businesses.

Likewise, it rings false that grocers that meet the same community standards as local liquor stores should not be allowed to compete. The customer should decide - and it probably is customer-minded voters who legislators expect to show up in greater numbers at the polls this fall.

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Send Gazette Business Editor Ted Rayburn your ideas on business and the southern Colorado economy at 636-0194 or ted.rayburn@gazette.com.

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