(The Center Square) – Breweries are upset with regulations imposed on them by the New Jersey Division of Alcoholic Beverage Control through their license renewals, particularly since an expected formal public review process never happened.
Craft breweries under limited licenses were never intended to get the same privileges of a consumption venue, such as a sports bar or restaurant under legislative intent, a release from the New Jersey Department of Law & Public Safety said when the special ruling was issued in May 2019. But craft breweries began serving beyond what limited licenses allowed. Bars and restaurant owners, whose licenses hold full retail privileges, made complaints of unfair competition.
The New Jersey Brewers Guild’s executive director, Eric Orlando, told The Center Square that his organization and other stakeholders had a meeting with the ABC in late spring to offer final input into what they expected would be a document for review. But the ABC adopted new regulations as licensing conditions for breweries without a formal comment process, he said.
“They in essence kind of adopted something that is on the books today without undertaking that process that they had envisioned in terms of a regulatory process,” he said.
The May 2019 ruling limited the number of TVs and their size allowed in a brewery and differentiated between amplified live music and recorded nonamplified music, he said.
“It specifically prohibited any brewery to work with an outside food vendor to provide food on-premise, or stop the brewery from working with a food truck to park off-premise to provide food to customers,” Orlando said.
The ruling limited the number of off-premise events that a brewery can host at 12 per year. Events at the brewery were limited to 25.
“So let's say you were to have a band on a Friday night, you'd only be allowed to have 25 of those a year,” Orlando said. “While you were able to show a Saturday football game, or Sunday football game on your TVs, if it was a championship sporting event – let's say the World Series or the Super Bowl – that would be thrown into the category of an on-premise event.”
Even regular sports events would count against the on-premises event limits if advertised, including a social media post, the updated limited brewery conditions posted by the ABC said.
“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,” James B. Graziano, director of the Division of Alcoholic Beverage Control, said in the release when the special ruling was issued in May 2019.
Many breweries have business models that depend on events and private parties financially, Orlando said. Their physical locations were built to accommodate events, but the ruling restricts monetizing those spaces.
“The number one issue is always liquor license value, whether it be a license value of the license at a bar restaurant has to serve and sell alcohol, the license value at the liquor store down the street that for six years, seven years are the only ones where you could buy a six-pack of beer, or any other type of alcohol,” he said.
The wholesale tier that has the almost exclusive privilege to distribute alcohol for the last 10 to 20 years has its own license value, he said.
“What it really comes down to is it's these new businesses starting and the pushback from those traditional entities against it,” Orlando said. “And this is being sold as a way by the state regulator as trying to balance those interests."
He said what it does in essence in the eyes of NJ Brewers Guild members is to take the side of traditional interests instead of fostering their business concepts and meeting the real consumer demand.