Senator Vin Gopal | August 20, 2022 | The Star-Ledger |
Last month, a special ruling by the New Jersey Division of Alcoholic Beverage Control took effect, placing a set of strict restrictions on the operations of New Jersey craft breweries.
As businesses in the state continue to deal with the aftershocks of the pandemic, historic inflation and a rash of supply chain issues driving up costs, this ruling came at a particularly bad time for New Jersey breweries. The ABC’s ruling also reflects a lack of clarity surrounding how state regulators should treat New Jersey breweries, which typically have limited brewery licenses that are separate from the liquor licenses obtained by bars and restaurants.
With both those economic concerns and the ongoing lack of clarity regarding brewery regulations in mind, I joined a bipartisan group of legislators this week in introducing legislation, S-3038, which will seek to ease the restrictions imposed on New Jersey’s breweries while also providing more clarity to state regulators.
The limited brewery license, which the New Jersey Legislature created in 2012, is a hybrid, providing holders with both manufacturing and retail privileges. The latest regulations have placed strict limits on breweries’ ability to function as retailers.
I’ve spoken extensively with New Jersey ABC Director James Graziano about these regulations and he has been very receptive and has indicated that this needs a legislative solution. He explained that in crafting the 2019 Special Ruling, ABC regulators were attempting to interpret the will of the Legislature. I look forward to continuing to work with ABC to put into effect new legislation that would clarify the intent of state lawmakers when it comes to regulating craft breweries.
Craft breweries have also proliferated since 2012. According to the latest numbers from the New Jersey Brewers Association, New Jersey is home to 141 craft breweries, which generated a lot of money tax revenue in 2021. But the industry’s growth is not unique to New Jersey — there are now more than 9,000 craft breweries operating nationally after 710 new breweries opened their doors in 2021.
The expansion of craft brewing in other states, particularly in neighboring states, will mean more competition for New Jersey breweries, and our state’s current regulations put the Garden State’s homegrown breweries at a distinct disadvantage.
Much of the discussion surrounding the ABC’s special ruling has focused on competition between breweries and traditional liquor license holders like restaurants and bars. But if we hamper New Jersey’s breweries through overregulation, they could soon be outpaced by breweries in states like Pennsylvania and New York.
Part of what our legislation would do is to remove limits on the number of events a brewery can hold in a year, either public or private. These caps have interfered with breweries’ ability to grow as they have barred breweries from promoting themselves and attracting more visitors to their taprooms.
In many states, lawmakers have found ways to incentivize collaboration between breweries and other local industries. Part of what my bill will do is create more opportunities for collaboration between breweries and other local businesses.
For example, the current regulations prohibit breweries from coordinating with vendors, like food trucks, to provide food to their patrons. This not only creates a potential safety concern — generally you want to encourage patrons who are drinking alcohol to eat, to slow the alcohol absorption — it closes off opportunities for local partnerships that could promote mutual growth.
Based on the conversations I’ve had with director Graziano, colleagues in the Legislature, and stakeholders from breweries and restaurants, I’m very optimistic that the legislation we’ve introduced will strike an acceptable compromise that gives New Jersey’s breweries more room to thrive while also maintaining the important distinctions between craft breweries and traditional bars and restaurants.
I want to thank our bi-partisan team of senators who have engaged on this topic, including Senators Linda Greenstein, Declan O’Scanlon, Mike Testa, Patrick Diegnan, Gordon Johnson and Andrew Zwicker. It is time for the legislature to act this fall!
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