New Jersey brewery owners are displeased with newly implemented rules imposed by the Division of Alcoholic Beverage Control July 1 that limited the number of events they can host, and other restrictions. The regulations are part of a special ruling the ABC issued in 2019, which followed a similar, harsher set of rules from 2018 that caused swift pushback from industry leaders and legislators alike.
Under the special ruling, New Jersey’s microbreweries are allowed to hold 25 on-site activities annually including sporting events and trivia, 52 private parties and 12 off-premises events. Before the ruling, breweries could hold an unlimited number of events. The ruling also requires breweries to give walking or virtual tours of their facilities before allowing patrons to drink any beer, and breweries can no longer coordinate with food trucks or vendors or serve coffee.
The rules have not been enforced since they were announced in 2019, in part due to pressing pandemic-related issues. But Carlstadt-based Bolero Snout Brewing owner Scott Wells said that the Brewers Guild, a trade group that lobbies for brewing sector interests, has been communicating with the ABC routinely on the special ruling since April 2021, providing feedback on how to improve it.
Breweries had to accept the special ruling to renew their brewing licenses in July, and Wells said he was surprised at the changes—and lack thereof—to the rules that were promulgated in 2019. Notably, the rules around off-premises events changed from a $200 permit for 12 one-day events to a $100-per-day permit for 12 up-to-three-day events.
“We never asked for that,” Wells said. “I shouldn’t have to use an event to play the Yankee game on a Tuesday night if we close in the second inning. And when I have to tell the two guys in my tasting room that they can’t watch the Olympics curling championship, that doesn’t [make sense].”
Chatham-based Twin Elephant Brewing owner Cindy Derama believes that the rules hurt the community as much as they hurt the breweries.
“It hinders us as breweries to be able to do small things to engage our communities. Breweries do a lot of charity work, we do drives all the time, and each time we do something special like that to count it as an event and to be limited is ridiculous,” she said.
Twin Elephant has a DJ every other week, and per the special ruling, each time he plays needs to be registered as an event. With the event limit, Derama would be out of events if the schedule stayed as is. “Because of that, we have him less and less because we do want to book other musicians and keep some events openings for things like doing a cheese pairing tasting with our local cheese shop. So it sucks, because we have to pick and choose our events, and the poor DJ guy gets booked less.”
According to ABC Director James Graziano, who did not issue the original rules in 2018 but did issue the 2019 special ruling, it was designed “to help craft breweries promote their products and build their business while continuing to balance the concerns of other licensees and ensuring compliance with state law.”
The other licensees Graziano refers to are restaurant and bar owners, who pay hundreds of thousands and sometimes over $1 million for the ability to serve booze alongside food.
Brewery licenses are comparatively cheap and cost just a few thousand dollars, a much lower buy-in.
“The [liquor] licensees have invested a tremendous amount of money and risk. It’s a very scary place to be. We understand that the restaurateurs are concerned that the breweries are turning into a restaurant-type concept,” said Dana Lancellotti, executive director of the New Jersey Restaurant & Hospitality Association, on restaurant owners’ concerns. “But we also understand that for the breweries, it’s really an awful lot of restrictions. Everyone should be able to grow their business.”
NJRHA recently hosted a town hall addressing New Jersey’s liquor license ecosystem, which was created nearly a century ago after Prohibition. Under the law, liquor licenses are limited based on population and rarely put on the public market. Liquor licenses therefore are sold private party to private party, often for high sums of money.
“We can’t reform the liquor licensing system in a day. It has to be done overtime, or else there are way too many people that will have too much financial loss at stake. Secondly, there needs to be more conversation. It’s important that the public understand this isn’t simple,” Lancilotti said.
Twin Elephant’s Derama agreed that the state’s liquor license system needs to be reformed but said that the breweries don’t see themselves as competition for the bars and restaurants.
“We actually want to work with them—we want to sell our beer to them. But the squeaky wheel gets the oil,” Derama said. While breweries like hers have support from their local restaurants, “[t]he ones that complain the loudest aren’t necessarily interested in craft beer, they’re selling macro, and they see us as competition even though it’s not necessarily the case,” she said.
Local politicians and state legislators have publicly come out against the limitations imposed by the special ruling. Westfield Mayor Shelley Brindle tweeted on July 11, “These ABC directives will squash our local breweries.” In a letter to Gov. Phil Murphy on July 13, state Sen. Troy Singleton, D-7th District, wrote that it was “prudent to immediately suspend these rules in the short term and allow for deeper engagement on the topic.” Singleton opined that the rules would “add additional barriers” to success for the brewers who are an “integral part of our small business community.” Assemblyman Raj Mukherji, D-3rd District, and several Jersey City councilmembers called on Murphy and acting Attorney General Matt Platkin July 15 to rescind the special ruling and craft new legislation to support the breweries.
Wells said he believes the response from industry members and the public, including a petition with thousands of signatures, will have an impact on the implementation of the rules.
“I don’t think nothing’s going to come out of this. At this point, there’s so much noise, I don’t think Murphy can ignore the problem. And if he ignores it, I don’t think he will when the first breweries go out of state or go out of business,” Wells said.