Liquor Stores Sue the State of Colorado Over Licenses Granted to Major Retailers Like Walmart, Costco, Target

The beer aisle at Liquor Mart in Boulder, Colorado. (AP Photo/Brennan Linsley)

On Tuesday, the Denver Post reported that four liquor stores in the Denver area are suing the state of Colorado, alleging it is illegally issuing too many liquor licenses to large grocery and big-box stores.

The lawsuit was filed in Denver District Court, and it’s targeting “liquor-licensed drugstores” such as Costco, Walmart, Target and King Soopers, a supermarket chain headquartered in Denver. The lawsuit claims Colorado’s Liquor Enforcement Division isn’t following a state law that restricts the owners of businesses with pharmacies to eight liquor licenses.

The lawsuit is being filed against the Colorado Department of Revenue and the Liquor Enforcement Division by Applejack Wine & Spirits in Wheat Ridge, Heritage Wine and Liquor in Englewood, Bevy’s Liquor World in Littleton and Bevy’s Liquid World in Parker.

The plaintiffs claim that before resorting to suing, they submitted two requests for a review of their complaints, but state officials failed to respond.

According to the Denver Post, one example cited by the lawsuit is centered around the Vanguard Group, an investment firm with ownership stakes in at least 29 liquor-licensed drugstores, including seven King Soopers and eight Costco locations. The lawsuit is claiming that since the verbiage on the law refers to “owner, part owner, shareholder or person interested directly or indirectly in a liquor-licensed drugstore,” the number of drugstores with liquor licenses should be significantly lower than it is.

The lawsuit also says the state isn’t complying with a prohibition against granting liquor licenses to businesses with pharmacies if they have an interest in other alcohol-related enterprises, such as restaurants, manufacturing and distribution.

“The State of Colorado’s Liquor Enforcement Division is blatantly and illegally benefiting large, out of state publicly traded corporations like Kroger, Albertsons and Amazon’s Whole Foods while simultaneously discriminating against smaller, privately owned Colorado liquor stores,” a spokesman for the plaintiffs said, according to the Denver Post.