New Bill Lessens Restrictions on New Jersey Microbreweries

New Bill Lessens Restrictions on New Jersey Microbreweries

The New Jersey Legislature is a considering a bill that would significantly amend the regulatory restrictions governing microbreweries. The legislation comes after the New Jersey Division of Alcoholic Beverage Control (ABC) issued a special ruling restricting their operations.

New Jersey Craft Brewing Industry

The New Jersey craft brew industry has grown significantly in recent years, largely in part to a 2012 law that reduced the red tape for the establishment of New Jersey breweries. Under the regulations, brewpubs were allowed to increase annual production from 3,000 barrels to 10,000. Microbreweries can also sell beer as part of a brewery tour as well as sell limited amounts for customers to take home. To date, ABC has issued 88 limited brewery licenses (including those holding Temporary Authorization Permits or “TAPs”), and an additional 23 applications are pending.

Alcoholic Beverage Control Special Ruling

On September 24, 2018, the ABC issued a special ruling seeking to clarify the rules for craft breweries. Under the ruling, breweries could only host 25 special events, such as trivia nights and live music performances a year. They were also limited to 52 private parties (weddings, birthday parties, etc.) annually. The special ruling also required breweries to provide electronic notification to the ABC 10 days prior to holding special events.

While the requirements restricted operations, the special rules also established new privileges, most notably, the authority to host up to 12 off-premises events per year. The special ruling also authorized breweries to sell water, soft drinks, and prepackaged snacks on the premises and allowed consumers to bring their own food. However, it prohibited breweries from providing restaurant menus or food truck offerings.

In response to widespread criticism from the New Jersey craft brewing industry, the ABC announced one week later that it would suspend the special ruling to further consult with stakeholders and lawmakers. “We want to make sure that we get this right,” said ABC Director David Rible. “We are committed to supporting the state’s growing craft beer industry, while also balancing the concerns of other stakeholders and ensuring compliance with state law.”

Proposed New Jersey Microbrewery Bill

Recently proposed bi-partisan legislation, Assembly Bill 4594, seeks to amend, clarify and significantly enlarge craft brewery activities. Breweries would be authorized to hold an unlimited number of on-premises special events, for which the brewery may sell tickets without obtaining a permit or providing electronic notification to the ABC.

The bill defines “on-premises special event” as an event that is open to the public and held on the licensed premises or the sidewalk, parking lot, or other area owned by the license holder that is adjacent to or adjoining the licensed premises and includes, but is not limited to: private parties such as birthdays, weddings, anniversaries, civic and political functions, professional and trade association events, class reunion and alumni events; trivia and quizzo; paint and sip; craft making; pop up shops; DJs, live music, and open mic; televised or streamed sporting events; educational events and seminars; movies and theatrical events; animal adoption, to the extent permitted by local ordinance; and yoga and other exercise classes.

Breweries would also be permitted to host up to 12 off-premises special events per year after obtaining a permit issued by the director of the ABC for each event. Under the legislation, “off-premises events” are defined as special events that take place at a location other than on the licensed premises or the sidewalk, parking lot, or other area owned by the license holder that is adjacent to or adjoining the licensed premises and include, but are not limited to: beer, music, and arts festivals; civic events; 5K races, mud races, bike races and other athletic events; limited brewery anniversary celebrations; and holiday celebrations.

Under the bill, a license holder is also permitted to deliver its product to a consumer’s home; sell soda (whether or not manufactured by the license holder); coordinate with a food vendor to provide food on the licensed premises; and provide menus to consumers. In addition, the legislation eliminates the requirement that breweries provide a tour to a consumer prior to serving alcoholic beverages for consumption on the licensed premises. The bill further provides that pourers and servers employed by the licensed brewery are not required to be certified by an industry-recognized server training program.

The proposed bill is likely a starting point for negotiations between lawmakers, the growing craft brewing industry, and restaurants as holders of existing liquor licenses. We continue to track the progress of Assembly Bill 4594 and will post updates as they become available.

If you have any questions, please contact us

If you have any questions or if you would like to discuss the matter further, please contact me, Gary Young, or the Scarinci Hollenbeck attorney with whom you work, at 201-806-3364.