07/15/2022
Colorado Distillers Guild - Legislative – Government Affairs Update – July 2022
During the 2022 Colorado Legislative Session, which finished-up a few weeks ago, the Colorado Distillers Guild was forced to fight a defensive battle against multiple threats. These included:
• I. A bill that would have applied a “sin tax” on all alcohol, to***co and opioid manufacturers and distributors in Colorado. Without going into a lot of detail, we and the other effected constituencies were able to work together to keep this bill from ever being formally drafted and sent forward. The concern, however, is that it will likely be proposed again next year.
• II. House Bill 22-1355 - The Producer Responsibility Program for State-Wide Recycling. This bill requires all industry that uses any sort of packaging to pay fees (essentially another excise tax, based upon production volume) into a fund to create a non-governmental agency to pay for recycling in Colorado. This agency under the proposed legislation would have had no oversight, and very broad powers to fine producers and “remove products from the Colorado market”. This bill is backed by Ball Industries (aluminum can manufacturer) and Coca-Cola (a major owner of recycling centers in Colorado). It is essentially a green-washing of the recycling and aluminum can industry’s business development efforts in an attempt to force Colorado’s manufacturers to pay for recycling services that the bills underwriters would provide.
We and others worked hard to defeat this bill unsuccessfully, as it could cause significant harm to Colorado’s Distillers. We were able to get changes made to the bill that was signed into law that made much of the bill a “study”, and required oversight of the new non-profit’s operations. We were also able to get language put into the bill excluding smaller businesses (including the majority of Colorado’s distillers). Regardless, this issue will remain problematic for all manufacturers and food producers of any sort in Colorado and will need to be revisited in the near future.
• III. House Bill 22-1417 – Alcohol Beverages Task Force and Retail License. This bill was a cobbled together piece of proposed legislation that included both a task force to rewrite Colorado’s liquor laws and a liquor compromise that would have undone the prior liquor compromise Colorado’s liquor constituencies worked so hard to put in place several years ago. Most notably, this would have eliminated the “Liquor-Licensed Drug Store” License that allows grocery stores to bring in spirits over time, while delaying wine in grocery stores for a few years. The latter half of this piece of draft legislation was an attempt by certain members of the alcohol constituency here in Colorado to delay big-grocery’s proposed upcoming ballot issues that will bring wine into all grocery stores, and allow for third-party delivery of beer and wine. The first half of this piece of draft legislation was to create by statute a task force to spend the next two years rewriting and renegotiating all of Colorado’s liquor laws. This piece of the bill was strongly backed by Governor Polis. The structure is something that was largely considered as unconstitutional by many. Further, it proposed that the distilled spirits industry would have only one member on this task force to represent all manufacturers, both here in Colorado and elsewhere. There were lots of problems that would have caused harm to Colorado’s distilleries in both parts of this piece of legislation. Fortunately, so many people opposed part or all of this legislation that it was killed in committee.
• IV. Formation of the Colorado Liquor Enforcement Division’s 2022 Advisory Group. In the aftermath of the failure of HB22-1417 to make it out of committee, the Governor Polis’ office has called for the formation of an advisory group to look at rewriting Colorado’s Liquor Laws (essentially the same task force that HB22-1417 would have created). While this effort will move forward, the Colorado Distillers Guild was successful in both making sure that there are two representatives from our industry in the group, one representing “local” manufacturers and one representing “large” manufacturers, and that one of those two be a Colorado Distillers Guild representative. Since this effort is no longer in statute as it was originally proposed, it means that the next couple of years’ legislative sessions will be heavily dominated by additional liquor issues coming out of the groups recommendations ... forcing the Colorado Distillers Guild to continue to be on the defensive.
• V. Alcohol Ballot Issues. The grocery industry has proposed multiple ballot issues here in Colorado to ultimately bring wine into all grocery stores and to allow beer and wine products to be delivered directly to consumers by third-party providers. While the most broad-reaching of these ballot issues has recently been struck down by the Colorado Supreme Court, Ballot Initiative #121 (wine in grocery) and #122 (third-party delivery) will ultimately move forward. Given the polling Coloradoans will likely vote to approve both next year, giving the beer and wine categories much greater market access then spirits, and threatening the future of the majority of Colorado’s liquor stores. In response the Colorado Distillers Guild will need to work with the other alcohol constituencies and the legislature next session to work out some sort of parity deal if possible. That may be an uphill fight.
In conclusion, the current legislative and regulatory environment in Colorado is rapidly changing, posing significant threats to Colorado’s distillers. As such, rather than being able to work on issues such as Direct to Consumer shipping and other things to help our businesses, the Colorado Distillers Guild will need to continue to focus most of our efforts on defense in our legislative and government affairs activities for the next couple of years.
Lastly, it should be noted that throughout this past legislative session the Distilled Spirits Council of the United States (DISCUS) has been incredibly supportive and cooperative with the Colorado Distillers Guild. This is largely due to both their CEO’s increased support of craft producers and their new regional Government Affairs Director, Kristi Brown. While the Colorado Distillers Guild and DISCUS won’t always have common ground or interests, many of these current issues are areas where we do share common purpose and their additional “reach” will continue to be incredibly valuable to us.
Stephen A Gould – Golden Moon Distillery
Board Member for Government Affairs - Colorado Distillers Guild
