Posted on 07/31/2023 1:11:40 PM PDT by nickcarraway
Having grown up in New Jersey, there are plenty of things about the state that I’m not particularly proud of. MTV’s “Jersey Shore,” for example, was not the best look, particularly not for Italian-American New Jerseyans like yours truly. And I remember feeling plenty of secondhand embarrassment watching residents turn every little statewide oddity — from full-serve-only gas, to Action Park’s dismal safety record — into points of burning pride to be loudly squawked about in mixed company.
But that embarrassment was just personal. It’s nothing like the professional mortification I’ve felt for the past year watching my home state fumble toward desperately needed, common-sense reforms to its outdated, arcane brewery laws, only to be undercut at the finish line by a one-time industry ally in the governor’s mansion. It’s a dramatic betrayal befitting “The Sopranos” — “They’re called ‘taprooms,’ T” — and while I wish it wasn’t worthy of national attention, it most certainly is. The legislative quagmire New Jersey’s brewers have struggled through for the past year is a poignant reminder that, despite the craft brewing industry’s collective arrival in the national mainstream last decade, breweries still operate under the regulatory idiosyncrasies of the states where they’re based. Some are more onerous than others.
For those readers not apprised of the sorry situation in the Garden State, a quick primer is in order. New Jersey is one of the few states in the country where liquor licensees are legally allowed to resell their licenses. That, coupled with the state’s nation-leading population density, and the fact that there are only a finite number of licenses capped by population, has made those licenses extremely lucrative for anyone who holds one. Like, “$1.15 million for a single license in 2016” lucrative. We love a secondary market that turns public permits into private assets to be bought and sold for orders of magnitude more money than intended, don’t we folks?! (We, like New York City’s cabbies, do not. But I digress.) This system has put the state’s powerful restaurant and bar owners crosswise with its craft breweries, many of which operate taprooms that do some of the same things as those businesses — namely, sell beer. Crucially, N.J.’s “limited brewery” licenses are different, and thus tend to be much cheaper to obtain. You can probably see where this is headed.
As N.J.’s craft brewery count slowly rose with the then-favorable industry tides last decade, the state’s ~6,000 liquor licensees, many of whom had paid gobs of money to third-party sellers for the privilege to sell beer, became increasingly agitated about this apparent encroachment. Brewery taprooms are not permitted to sell food, but in 2012, the state’s Division of Alcoholic Beverage Control prohibited them from hosting food trucks. In 2019, it rolled out restrictions on the number of events they could hold annually and a rule designed to make brewery tours more substantive. And so on. Taken together, the agency’s various interpretations and rulings of existing laws on the books have helped to hamstring the state’s craft brewing industry: Despite being the country’s ninth most populous state, it ranks just 44th in breweries per capita, according to the Brewers Association’s 2022 data. Are you surprised that New Jersey craft brewers and their boosters got the impression that the state was kneecapping (figuratively, not “Sopranos”-style) a growing industry at the behest of an incumbent one?
I’ve lived out of state for many years, so I wasn’t following this situation closely until last summer, when the N.J. A.B.C. announced that it planned to begin enforcing the licensing rules as written for the state’s 150-plus craft breweries. (Prior to that, enforcement was reportedly pretty loose due to a combination of fewer breweries, then the Covid-19 pandemic.) As Eric Orlando, executive director of the Brewers Guild of New Jersey, told Good Beer Hunting’s Kate Bernot in July 2022, regulators appeared to “have put themselves in the position of [picking] winners and losers” by enacting the conditions, particularly coming off the heels of the pandemic.
As someone who’s spent a dozen years and countless hundreds of dollars at New Jersey bars, restaurants, and liquor stores and come away mostly underwhelmed, I think the A.B.C. picked the losers in this case. But hey, agencies overreach and misinterpret and muck stuff up sometimes, especially when laws are vague and/or old. So while I was sympathetic to Garden State brewers’ cries of foul, I was gladdened to see them actually take action on it, bending the ears of legislators around the state to the f*ckery at hand and begging for reform.
The sum total of these efforts coalesced in an astonishing legislative triumph late last month, with lawmakers in both the State Senate and General Assembly unanimously passing a bill, S3038, designed to update and neutralize some of the more restrictive aspects of the N.J. A.B.C.’s enforcement regime and make things easier on the state’s beleaguered breweries. Unanimously! In this hyper-partisan political climate! In New Jersey, a state that can’t even agree on whether its beloved hog-based breakfast log should be called “pork roll” or “Taylor ham!” All that stands in the way of the bill becoming law is the signature of Governor Phil Murphy, who has called the state’s craft brewing industry “a source of pride” in the past, and partnered with breweries to offer free beer to drinkers in exchange for getting vaccinated during the pandemic. He was widely expected to sign the bill, and why not? Given his previous support, his John Hancock seemed a mere formality.
You probably see where this is headed.
With the duly passed legislation on his desk, and super-majorities of New Jerseyans indicating in polls that they want to bring their state’s craft brewing industry into the modern era, Murphy is now playing spoiler, refusing to codify the brewery relief bill in favor of holding out for “comprehensive, broad-based [liquor] license reform” in the state. Which, like, sure, given the undue influence the “New Jersey liquor cartel” (as New Jersey Star-Ledger columnist Paul Mulshine calls the state’s licensees) has had over this process, I can see merit in overhauling the whole damn system. But in the meantime, the state’s breweries are twisting in the wind, with only a promise on June 30 from the A.B.C. to suspend enforcement for six months standing between them and the Dark Ages. The governor’s gambit, as assessed by Mulshine and other readers of the Trenton tea leaves, is to keep breweries in limbo and leverage their plight into political might. Whether it works remains to be seen, but anyone can see right here and now that it stinks for N.J. breweries.
As someone who’s covered the beer business for over a decade, I can’t say I’m surprised. Throughout the country, statehouse battles over brewery reform have produced many bizarre outcomes, chicanerous horse trades, and strange bedfellows over the years. But as someone who hails from New Jersey, I can’t say I’m proud to see it happen there.
🤯 Hop-ocalypse Now
In the very first Hop-ocalypse Now section of this column, published on Sept. 15, 2022, I noted that Buffalo Bills fans drank more Michelob Ultra than any other draft beer at the N.F.L.’s Thursday night season opener, per data from the folks at BeerBoard. Not even a year later, and there’s more troubling news out of Western New York: The official sponsor of the Bills Mafia’s 2023 season is a raspberry-flavored malt beverage named Throwback Tea. What? The more folding tables they body-slam… the harder they’ll tea? That doesn’t even make sense!
📈 Ups…
In *breaking news* on Wednesday evening, Anchor Brewing Union advised Sapporo USA that workers want to purchase the brewery and run it as a worker co-op.… Should that not come to fruition, Anchor workers tell me the severance packages from Sapporo USA are actually decent… The Beer Institute refused to take Senator Ted Cruz’s bait regarding Bud Light’s alleged ad code violation with Dylan Mulvaney…
📉 …and downs
Just four West Coast states make up half of all hard kombucha sales, despite yearslong eastward expansion efforts… As liquor continues to steal share, the Beer Institute, Brewers Association, and National Beer Wholesalers Association are at odds over potential TTB reforms… Year-over-year inflation on both on- and off-premise beer prices in June continued to outpace the economy overall… Here’s how Sapporo USA’s PR pro spun the Anchor story to mainstream media…
This is not true. Limited Breweries in the State of NJ were never allowed to run their taprooms with events, like a bar. That was never allowed. What NJ did do was to allow Limited Breweries the ability to host 25 events per calendar year, 52 private parties, and a few other items. This special ruling ALLOWED Limited Breweries to hold these events with the requirement to notify the NJABC via a notification system. It also clarified what a "tour" was (a statutory requirement) and who had to take it. It could be virtual for customers returning to the brewery but first time visitors had to be given a physical tour.
Now that being said, I don't think there should be any restrictions with regards to events (which temporarily right now there aren't because the NJABC issued a statement due to this pending legislation sitting on old bucktooth's desk that they are not enforcing any of the rules presently, and from what I heard not until December 2023) and the tour requirement should be removed (but this requires the state assembly and state senate to pass a bill and the demented woodchuck to sign it.
One of the real issues with breweries complaining about the special ruling is that they set up their business on the foundation that they would be able to do whatever the hell they wanted in their taprooms (which I am not opposed to) but was not true when they opened their doors. They based their business model and projected revenue on a false assumption.
And it shows because the author doesn't have all of the facts correct.
I thought in NJ that if the bill is not signed by the Governor it becomes law automatically after 10 days not including Sundays.
Which was outrageous!
He was widely expected to sign the bill, and why not? Given his previous support, his John Hancock seemed a mere formality.
Because the restaurant association is lining his pockets.
New Jersey Cracks Down on Breweries for Hosting Trivia Nights, Serving Food
I agree but these events were always prohibited and the special ruling 2019 allowed a limited amount of them. This is what people who have no idea what is going on with limited breweries in NJ are misreporting.
Are there any other states where beer can be brewed?
So breweries were always forbidden from selling food? And breweries always required a membership with a mandated tour? I don’t remember that when I lived there.
What possible public interest would there be in forbidding a brewery from selling food? If anything, I can imagine the opposite, that breweries be required to serve food.
Why should breweries be the exception ... Murphy screws everything else in NJ.
must require patrons take a detailed tour of that brewery before purchasing any alcohol for consumption on or off site. The tour may not include sampling beer. ("A licensee must provide such a tour prior to allowing any on-premise consumption, including but not limited to consumer sampling.")
This is in the state law so a bill must be passed and signed to get rid of this requirement
may not sell or serve food beyond trivial quantities of "water and single-serve, pre-packaged crackers, chips, nuts and similar snacks."
This was more restrictive prior to 2019 special ruling. Before that you could not sell a thing with regards to any type of redi-made food
A brewer also may not partner with one or more food trucks to offer food for sale on the premises.
This has always been prohibited by the NJABC
may not sell mixed drinks containing beer on the premises.
This depends on what a mixed drink is. If it contains liquor then this has absolutely been prohibited from the beginning but if you are talking about a shandy or a radler then it is to be ignored and I have never heard of any brewery being cited for mixing their craft beer with lemonade or some other non-alcoholic drink
may not offer either free drinks "as a gesture of good will" or discounted drinks.
This is in direct contradiction with the law which states that a limited brewery may offer 4x4 oz tasters of their malt beverage gratis to a patron of age a day. Again, ignore it and it is also not enforceable as well
may not brew and sell coffee or may not sell any soda that is not produced at the brewery.
Has not been allowed from the beginning and since coffee and soda are considered food I can see how it would be prohibited.
may not host "'pop up' shops, bazaars, or craft shows."
This was never specified by the NJABC prior to the 2019 ruling so they just made this up
may not host more than 25 special events per year. Special events include live music, trivia nights, a "live-televised championship sporting event," or the showing of any television program—news, sports, movie, etc.—that the brewery markets via social media. may not hire an outside marketing company to assist with any special event.
Limited Breweries were allowed ZERO prior to the 2019 ruling. The NJABC granted the privledge of 25 events, 52 private paries and 12 off-premise events. As for the marketing nonsense more BS that is not enforcable and I have never heard of any brewery being tagged for this.
What I am really upset about is what are the violation amounts for certain activities? They seem to be made up based on the whim of the NJABC. Thousands of dollars for a tour violation not based on any schedule of offenses and fines just totally arbitrary.
One of the great things about the law change in 2012 was that they did away with the ridiculous post-Prohibition era 3-tier distribution model most likely because Bud was not around to lobby against craft beer in Trenton at the time.
"We pay a million dollars for a liquor license and a craft brewery can pay as low as $1250 per year for their license, its not fair they can do the same things as us"... but their argument is flawed. Breweries can only serve what they make, make HUGE investments in stainless steel and infrastructure a restaurant doesn't have to make and makes most of their money wholesaling their product (large ones anyway).
Even the core point of the TIPS certification training, which is required of everyone serving beer at a brewery in NJ by the NJABC, agrees with you. Food needs to be served to reduce people getting loaded out of their mind.
This is why the NJABC capitulated in allowing bars and breweries be allowed to have peanuts, chips and other de minimis snacks on the bar for patrons. It was incredibly hypocritical. They bought into the whole "salty snacks are to sell more beer" BS.
The NJABC and alcohol laws need to be revised but for the Woodchuck to sit on the bill calling for a comprehensive alcohol bill instead is BS. Pass what is sitting on this desk there and move forward.
meant: Restricted brewery can serve food
If only this was their biggest problem! NJ has been goose stepping in the wrong direction for decades!
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