Some breweries feeling sting of new ABC rules

Terry Benfer and her sons, from left, Jeff, Dan and Kevin, are co‑owners of Raritan Bay Brewing Co. in Keansburg.-(AARON HOUSTON/FILE PHOTO)

Village Idiot Brewery in Mount Holly has held a trivia night every Thursday for the last three years. Owner Vince Masciandaro estimates that 60 percent of his business on that day comes from patrons wanting to test their knowledge over beers.

Village Idiot Brewery in Mount Holly has held a trivia night every Thursday for the last three years. Owner Vince Masciandaro estimates that 60 percent of his business on that day comes from patrons wanting to test their knowledge over beers.

“We try to do something on a Thursday to get people in [because] 95 percent of our revenue comes from our tasting room. We don’t get people in, we don’t make money,” said Masciandaro.

But now, a special ruling issued Sept. 24 by the New Jersey Division of Alcoholic Beverage Control will limit the number of events breweries can host to 25 per year, meaning Masciandaro will have to substantially cut back the frequency of trivia night — or even cancel it altogether.

Masciandaro is far from the only brewer to be stung by the ruling.

“The ABC special ruling is a bit of a concern for us,” said Jeff Benfer, co-owner of Raritan Bay Brewery in Keansburg. “The main thing for us is we’re a small brewery, very focused on being part of the community here in Keansburg. This ruling, by limiting the number of events we can have, prevents us from being part of the community.”

Some, like Benfer, believe the decision was dropped in their laps — no opportunity for public comment, no chance for input from the towns.

“The whole rulemaking process seems I’d go so far as to say antidemocratic … and a violation of home rule,” he said.

Benfer is a member of the New Jersey Brewers Association, which represents independent breweries and affiliated groups. He said he was told something was coming down the pike, but not the full extent of the changes.

“We were told there were some rule changes coming, but we weren’t told the full story, and we as a brewery were not involved in the process of formulating these rules,” he said. “Maybe other breweries have a closer relationship with the ABC and were more closely involved, but I can speak for myself when I say we weren’t given the chance to be involved with any real input.”

But the ABC, NJBA, Brewer’s Guild of New Jersey and New Jersey Restaurant and Hospitality Association all say that no one should be surprised. Representatives from each group met for months — since October 2017, according to an NJBA representative — trying to come up with a satisfactory outcome.

Since legislation was passed in 2012 allowing breweries to have tasting rooms, there has been what some call a grey area around what is permitted at the tasting room itself, other than a required tour before tasting and restrictions on serving food.

What the groups settled on was this: Breweries can have 25 on-premises special events and 52 private parties per year, and set up shop at 12 off-premises events as well — as long the ABC is notified 10 days in advance. They are also now allowed to sell packaged snacks, but not allowed to distribute menus from nearby restaurants for food to be delivered.

According to Marilou Halvorsen, president and CEO of the NJRHA, breweries have been crossing a line by hosting myriad events, turning their tasting rooms into social hubs instead of showrooms.

“If you want to be a bar, then go get a liquor license, and [then] have to comply with rules and regulations just like everyone else,” she said.

Halvorsen’s constituents pay hundreds of thousands of dollars, sometimes upward of $1 million, on liquor licenses. By contrast, limited brewery licenses run a few thousand dollars.

Masciandaro, however, said he believes the breweries have been acting within the regulatory framework.

“We were the first to do this [taproom-focused] concept in 2012. There was nothing wrong with what we did. Now they’re changing the rules, after we spent thousands of dollars on our tasting room and equipment,” he said. “They say it was a grey area but I followed what the law said. If I wasn’t following the rules, they would have fined me.”

Whatever grey areas may have existed seemingly were eliminated by ABC Director David Rible’s special ruling, which he wrote to clear up “significant confusion” around “what constitutes an appropriate tour and what constitutes permissible activities.”

According an ABC spokesperson, the ruling is a precursor to regulations that will be created through the state’s regular rulemaking process, allowing for public input. Effective immediately, the special ruling will last six months or more on a pilot basis.

Not all brewers are dissatisfied. Chris Walsh, founder of River Horse Brewing Co. in Ewing Township and one of the founding members of the Brewers Guild of New Jersey, said he “feels pretty good” about the ruling, noting that “without going through the whole legislative process, which takes forever, the ABC worked something out the best it could to put some structure in place to at least tell everyone what they can and can’t do.”

“If you look at the laws, our license is [for] a manufacturer,” he said. “We’re a manufacturer of beer and we have a consumption privilege. It’s not a consumption license with manufacturing privilege. You can put the whole licensing system on trial, but the reality is a license is a manufacturing license. That’s the position the ABC took. You’re a showroom.”

Masciandaro isn’t buying that argument.

“When you look at it against the other manufacturing licenses — the wineries and distilleries also have manufacturing licenses — I think we’re being unfairly targeted,” he said.

Rible, who penned the ruling, was appointed to the ABC post last year by then-Gov. Chris Christie. During his successful run for re-election last year for the District 30 Assembly seat he’d held since 2012 — which he later vacated to become ABC director — the Republican received thousands of dollars in campaign donations from the licensed beverage and liquor store lobbies, beer distributors and restaurants, according to the Election Law Enforcement Commission. In previous years, he received about half as much.

Attempts to reach Rible were unsuccessful at press time.

Disgruntled brewers have taken to grassroots organization to fight the special ruling. A petition created by Independent Brewers of New Jersey had garnered 18,400 signatures as of midday Sept. 26.

NJBA Executive Director Jamie Queli said the organization plans to work on wording for a bill to alleviate many of the problems the breweries are facing regarding live entertainment, food regulations and franchise laws.

“We have an internal plan of action we are working on. It’s going to ensure the craft that we’re doing is protected,” she said.

Meanwhile, Village Idiot’s Masciandaro said his team would just have to work harder at getting people in the door without special events like Thursday-night trivia.

“We’ll have to do our 25 events and run the numbers at the end of the year,” he said. “If it works, it works. If it doesn’t, we’ll close down.”

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.

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