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How Antiquated Laws Make Wine More Expensive in Colorado


The Colorado wine scene boasts strength thanks to its alluring resort towns like Aspen and Telluride, coupled with a concentration of master sommeliers in Denver and Boulder. However, the potential for an even more vibrant industry is hindered by less favorable regulations compared to wine havens like New York and California. A tangle of laws restrains the Centennial State from fully competing with these wine giants, leading to higher wine prices and unique challenges. In this article, we delve into the complexities of wine regulations, uncovering how they contribute to the higher costs of wine in Colorado compared to New York and California.

1. **Required Third and Fourth Tiers**

The USA's alcohol distribution system operates under a "three-tier" structure, dividing roles into producers, distributors, and retailers/restaurants. While California streamlined this system by allowing producers to directly sell to retailers or restaurants, many still opt for distributors due to logistics. For imported wine, both New York and California permit importers to double as distributors, importing and selling wines without a third-party intermediary.

Colorado deviates from this by mandating that importers must sell to distributors rather than retailers or restaurants. Although this rule accommodates importers who are based in New York or California, it adds an extra layer of markup when wine is sold to consumers in Colorado. Consequently, imported wines bear a 20-30% wholesale cost increase, directly affecting retail prices. Even the handful of importers who are based in Colorado are required to use a separate distributor. Domestic producers have a more direct route to Colorado distributors, but out-of-state wineries would be unlikely to sell directly in Colorado even if it were allowed due to logistical challenges.

2. **Absence of the "Gray Market"**

New York's wine appeal partially stems from its allowance for restaurants and retailers to purchase wine from consumers, a practice known as the "gray market." This grants access to older vintages that might be otherwise cost-prohibitive due to warehousing fees or premium pricing from producers and distributors. Regrettably, Colorado prohibits retailers and restaurants from obtaining wines from personal collections. This lack of access hinders the availability of older vintages and places Colorado at a disadvantage compared to more permissive markets.

3. **Distributor Monopolies**

While importers can switch distributors, Colorado enforces a one-distributor policy for the same wine. As a result, distributors that collaborate with esteemed New York importers possess a monopoly on that importer’s wine sales in Colorado. This control over rare wines empowers distributors to set prices based on demand, often resulting in inflated costs for consumers. This monopolistic environment curtails competitive pricing and limits the selection for retailers, who struggle to match New York prices.

4. **Logistical Costs**

Colorado's geography contributes to elevated distribution costs compared to other states, even without legal constraints. Shipping expenses for imported wine are approximately $1 higher per bottle than coastal states, and this additional cost is compounded through the four-tier system. Furthermore, navigating mountainous roads for deliveries in the winter season incurs extra expenses, ultimately translating into higher wine prices across the state.

5. **Lack of Corkage**

In Colorado, an unconventional barrier exists in the form of corkage, the practice of bringing one's own wine to a restaurant for on-premise consumption. While many markets allow this with a fee, Colorado legally prohibits it. This restriction dampens the fine wine scene, as collectors and enthusiasts are unable to bring their own aged bottles to complement their dining experiences. The absence of corkage adds to the overall challenge of enjoying fine wines in the state.


Colorado's potential to rival the fine wine markets of New York and California is curtailed by outdated regulations that impede growth and accessibility. Although the likelihood of overturning these rules is slim due to the industry's niche nature, the state's wine enthusiasts and businesses can remain optimistic about their unique offerings. While these laws currently favor distributors, Colorado's wine scene continues to hold its own, demonstrating resilience in the face of regulatory challenges. And it could be worse — we could be in Utah.


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