The struggling Rio Theatre has been forced to pull out of the Vancouver International Mountain Film Festival in an ongoing battle over liquor licensing.

Thirty-five movies from the festival were supposed to be shown at the East Side landmark, but the theatre has been forbidden from showing films since earning a liquor licence last month. The Rio had been trying to re-invent itself as a part-time venue for concerts.

"I'm getting really angry and really frustrated," owner Corinne Lea said at a press conference Monday.

"It's so devastating to me and my staff."

She wants the right to lock away the booze when the films begin, an impossible proposition because of a Prohibition-era provincial law.

The theatre is getting support from competitors, including Festival Cinemas owner Leonard Schein.

"If anybody can give me a logical reason why this theatre cannot show movies and not sell alcohol, I would really love to hear it," he said.

The Rio has had to lay off five employees and lost $40,000 now that it's not involved in the festival.

The festival's Alan Formaneck says that's a real shame.

"It's a devastating thing for our community to not have access to Rio because of this illogical law," he said.

The city and the opposition NDP are both pushing the province to make an immediate change to the law.

"It's just a stroke of the pen, literally. Pick up the pen and sign an OIC and get it done," jobs critic Jenny Kwan said.

Solicitor General Shirley Bond will only say that the government is reviewing liquor policies.

"If the decision is specifically about the Rio licence, I am not in a position to make that," she told CTV News.

Meanwhile, Lea has already taken out a second mortgage in an effort to save the theatre.

"I feel like David and Goliath. How much more can we do to try to stay in business? How am I supposed to fight the B.C. government?" she said.

With a report from CTV British Columbia's St. John Alexander