Editor’s Note: James M. Graziano is a partner with Archer & Greiner in New Jersey. For the past five years he has served as counsel to the New Jersey Brewers’ Association.
Since the New Jersey Legislature’s 2012 enactment of legislation creating a new license for craft brewing in New Jersey, not even the Legislature could have foreseen how wildly successful its actions would be in meeting the demand of state citizens. In the last decade, there has been an explosion in craft breweries throughout the state, with close to 150 craft breweries currently operating and a number more in the pipeline.
A significant part of the success of New Jersey’s vibrant craft brewing industry has been driven by the ability of consumers to sample breweries’ products at their tasting rooms, a specific retail privilege granted under the 2012 limited brewery statute. However, the statute unfortunately did not set forth any parameters under which craft breweries could operate their tasting rooms – thus leaving the rapidly expanding industry with little explicit guidance.
The New Jersey Division of Alcoholic Beverage Control (ABC) aimed to address this issue and define the retail privilege granted by the limited brewery statute. In 2018, the ABC released a special ruling that defined permitted and prohibited conduct by limiting both the quantity and type of on-site events in tasting rooms, the number of private parties craft breweries could book and the structure of those parties, and other conduct within the tasting rooms. The ABC also granted limited breweries privileges not expressly provided in the legislation, such as the ability to participate in offsite events and to host charitable and community events under social affairs permits.
All of this was to fill what the ABC perceived as a hole in the statute, which provided for a retail privilege while only requiring craft breweries to give tours prior to serving alcohol and allowing limited food sales. These restrictions were mostly overlooked during the COVID-19 pandemic as the ABC worked to try and help local businesses stay open. Recently though, the ABC has attached these restrictions to the licenses of each craft brewery, signifying an intent to enforce them going forward.
Unfortunately, while well intentioned, the ABC has hindered craft breweries’ ability to succeed by imposing these restrictions. The New Jersey Legislature has since responded by introducing three bills aimed at solving the problem: the Senate is considering two bills, S3038 and S3042, and the Assembly is considering A4630. The bills are designed to make explicit that craft breweries may host events, participate in community and charitable endeavors and further integrate themselves into their communities.
Allowing the activities that craft breweries have been undertaking, such as live performances by local musicians, trivia nights, charitable events and the like, which are available to other liquor license holders, removes obstacles to the success of these small businesses. Each of the bills also give clarity that craft breweries should be on equal footing with liquor establishments in terms of how they operate their tasting rooms. The bills further remove extra hurdles placed on small businesses coming out of the pandemic and recognize that there has never been shown to be any actual harm from holding events at limited breweries.
Failure to pass these bills will undoubtedly hurt New Jersey’s craft breweries, which in turn negatively impacts the local economy and communities in which the breweries operate. For example, downtowns throughout the state, such as Pitman, Haddonfield, Point Pleasant and Medford, have been revitalized around craft breweries. Plus, breweries have become an important part of the fabric of their local communities – for example, there has been a significant increase in local farmers markets, which has been at least partially buoyed by the ability of craft breweries to sell their goods at those markets, and craft breweries often give back to various charitable endeavors. A notable example being five New Jersey breweries coming together to release a joint Thanksgiving beer, with proceeds donated to local food banks.
The bills are necessary to allow craft breweries to continue to be intimate parts of their communities and help charitable and community causes. Further, they encourage the growth of small business while meeting demand of local citizens and communities across New Jersey. As an industry, we need to advocate for the passage of these bills to ensure a continued thriving craft brewing scene in New Jersey.