NJ microbrewery rules would scale back stricter September proposals

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On Monday, the Division of Alcoholic Beverage Control proposed new regulations for the state’s microbrewery industry that would scale back many of the tighter restrictions initially proposed in September, and then ultimately rescinded a week later.

Last year’s restrictions came as a surprise to many owners within the microbrewery industry, who worried the rules were heavy-handed enough that many establishments could lose their customer base and go out of business.

“The growth of the craft brewing industry in New Jersey has become increasingly important to the economy of the state of New Jersey and, even more importantly, the local communities where craft breweries are operated,” reads a May 28 letter from ABC Acting Director James Graziano.

Microbreweries, which require a “limited brewery license” from the state, typically sell specialty beers produced on site.

“While the Division of Alcoholic Beverage Control supports the growth and success of our limited breweries, regulatory issues in this portion of the larger alcoholic beverage industry must be addressed,” Graziano adds.

Like with the October proposals, Tuesday’s rulings impose a 25-per-year limit on “special events,” but provides a much narrower definition on these types of events to include “those promoted through the media,” or those that “provide entertainment in the form of live championship sport event broadcasts, live amplified music or DJ performances.”

Special events, unlike under the October proposals, would not include commonplace events such as yoga, karaoke and trivia nights, which microbrewery owners said were staple offerings that make up a sizable chunk of customers.

Microbreweries can hold up to 25 “social affairs events,” which covers those hosted for “civic, religious, educational, charitable, fraternal, social or recreational purposes.” They can also hold up to 52 private parties a year, which covers birthdays, anniversaries, weddings, class reunions and alumni events, political functions and professional and trade association events.

The new proposals create a “limited brewery off-premises event permit,” allowing the microbrewery to hold 12 off-site events such as town events, where the owner could sell and provide a limited amount of sample of their products.

Tuesday’s rules still require that microbreweries must give tours, but broadens the definition and stipulates “repeat customers” only have to go on a single tour a year. As with state law, tours have been required by microbrewery owners before they could purchase the business’ wares.

The new definitions and rules surrounding tour-offerings will be effective immediately, but the ABC will gradually roll out the other proposals over the next several months.

The proposals ban owners from selling food and coordinating with local restaurant owners and prohibits food trucks and vendors from setting up shop on the business’ property. But unlike the October proposals, owners would still be allowed to offer menus for nearby restaurants, while patrons would still be allowed to order delivery to the site and bring their own food for events, at the discretion of the business owner.

“We believe the activities permitted under this special ruling strike a fair and appropriate balance between the interests of full retail license holders, such as restaurants and bars, and the craft brewing industry,” Graziano said.

The acting director said the new rules are in line with the 2012 legislation that allowed microbreweries to do business. But any issues with the directive, he said, would be up to the state Legislature to handle.

“If there is a need for or interest in adjusting or further expanding the privileges available to limited brewery licensees, that would be a matter for consideration by the legislature,” Graziano said.

The New Jersey Brewer’s Association agreed, arguing that the 2012 legislation was outdated and in need of modernization to accommodate the microbrewery market.

“It is ultimately detrimental to the economy to unnecessarily hamper business models that have been overwhelmingly propelled by and beneficial to the residents in this state with arbitrary limits on events that have been deemed appropriate for these venues,” reads the Tuesday afternoon statement.

“The only true, permanent fix is for the Legislature to clarify their own legislative intent in creating these retail consumption spaces, and to act to modernize the entire liquor license process in the state,” the NJBA adds.