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Not so simple

In the wake of a new ABC special ruling, brewers seek clarifying legislation about their events

It’s Monday evening at Death of the Fox Brewing Co. in Clarksboro and the floor is peppered with people in yoga clothes practicing poses or meditation. The event is Mindful Monday and it happens every month in partnership with Ananda Yoga and Wellness in Wenonah to draw folks into the brewery and give them two ways to wind down, first with yoga and then with beer.

Patrons gather at Lower Forge Brewery in Medford. – ABBIE GALIE

The event typically draws 30 or so people, notified by an active Facebook events page. But an updated special ruling from the Alcoholic Beverage Control issued May 28 threatens to put a stop to the weekly zen by limiting where they are advertised—including on their own social media accounts.

Under the ruling issued by Acting Director James Graziano, breweries are allowed 25 on-premises special events, 52 on-premises private parties, and 12 off-premises events per year. A more stringent special ruling was issued in September by then-director Dave Rible, only to be rescinded about a week later after an uproar from the brewery industry that included a petition with nearly 30,000 signatures. Unlike September’s ruling, common brewery events like trivia, yoga, craft making, and animal adoption events won’t count toward the brewery’s limit, but there’s a catch: they only don’t count if the advertising is limited to posters on the brewery’s walls.

“How 1982 is that?” asked Death of the Fox founder Chuck Garrity, who said the limit on social media advertising poses a huge issue for his business.

“It’s a way that we can notify the people who follow our brewery and who love our brewery and to have a direct communication link to them. Facebook is basically the hub,” he said.

‘A huge hit to my business’

Garrity’s business increases 25 to 30 percent when he holds events on the weekends. Posters just inform “the customers there at that given time, not people who follow us online” who only want to visit a couple times a month, or less frequently than that. “It’s absolutely a huge hit to my business,” he said.

Lower Forge Brewery. – AARON HOUSTON

An event will also count toward a brewery’s special event limit if a business the brewery partners with for an event posts about it. Abbie and Sean Galie, owners of Lower Forge Brewery in Medford, believe it’s more than just a stumbling block for their business.

“It calls into question freedom of speech,” Abie Galie said. “How are we going to tell other people what they can say?”

Abie and Sean are involved with the Independent Craft Brewers of New Jersey, a cohort of brewers petitioning lawmakers to consider legislation delineating exactly what breweries can and can’t do. As of June 5, the ICNJ had sent over 4,000 letters to legislators from people who feel the same.

“[The ABC] approached this special ruling in better faith [than in September]. The problem is in the end, the ABC can’t solve this,” Sean Galie said. “Even if the director says tomorrow ‘these breweries are awesome, let’s let them do what they want,’ 10 years down the road, if the next one [doesn’t agree], having it encoded in law is the way to ensure sustained growth. Then someone investing in this industry won’t have to worry their money could catch fire down the road.”

In the announcement from the ABC on May 28, Graziano said that, at the end of the day, the ABC’s job is to “set limits on what licensees are entitled to do under existing laws and to level the playing field so that all limited breweries can compete fairly with each other,” and that further expansion or adjustment of privileges would need to be taken up by the Legislature.

‘They’re still not happy’

According to the restaurant lobby, though, further legislation isn’t necessary because breweries that host events are already acting beyond the original intent of the bill that created the New Jersey craft brewery industry in 2012.

Halvorsen

“The rules are pretty much outlined in the legislation,” said New Jersey Restaurant and Hospitality Association President Marilou Halvorsen. “In the original intent of the legislation, their license was originally structured was to be for tasting rooms. You were supposed to have flights and then fill up your growler or go to your local restaurant to have the beers you tried.”

“Years ago, they testified they didn’t want to be restaurants. They just wanted to manufacture and sell their beer,” Halvorsen said. “Now they’re wanting to change the rules, and that’s fine, but now that they have rules the director just released that they were part of negotiating and discussing, they’re still not happy.”

According to the NJRHA, although the brewery industry has grown, tax revenue from the sale of alcohol has been relatively stagnant, raising concerns that further relaxing rules for microbreweries will only prolong a re-allocation of consumer dollars, in a system where restaurants paid hundreds of thousands of dollars for a liquor license and breweries paid just a few thousand dollars in comparison.

Garrity doesn’t see the difference in licensing cost as a reason to crack down on the number of brewery events or how to advertise them, though.

“[Plenary liquor licenses are] an asset. Breweries, we don’t have an asset. We pay a yearly permit fee,” he said. “They own the mortgage, we rent the apartment. Our equipment depreciates in value; a liquor license appreciates in value.”

For Garrity, his fiercest competition isn’t local restaurants—it’s breweries across the border in Pennsylvania, just 15 minutes away.

“I’m concerned about beverage tourism, and I’m concerned they’ll say ‘Jersey breweries are lame.’ It’s not just a product business anymore,” Garrity said. “Part of having a brewery is having an engaging and thriving tasting room. It’s an experience. Millennials expect an experience, not just a product. Why can’t I give that experience?”

Alexis Deegan, executive director of the New Jersey Brewers Association, said the organization is engaging with lawmakers in hopes of pursuing the legislation they believe will confirm breweries’ right to host events and to advertise them; and continuing to work with the ABC to see how the special ruling plays out in real time.

“We’re thankful to the ABC for sitting down with us as often as they did and for taking our perspective into consideration. They’ve certainly sent out more liberal rulings than last time,” Deegan said. “Events are the marketing tools that get people in your brewery. It’s the product that will keep them there and keep them coming back.”

Gabrielle Saulsbery
Albany, N.Y. native Gabrielle Saulsbery is a staff writer for NJBIZ and the newest thing in New Jersey. You can contact her at gsaulsbery@njbiz.com.