A one-syllable, four-letter word has been on the minds (and mouths) of legislators, business owners, and residents of New Jersey over the past several weeks…BEER. While not everyone enjoys a Hefeweizen or Kolsch on a hot summer day or a Porter during the cooler months, nonetheless, the great state of New Jersey has about 140 microbreweries within its borders. This number may seem significant based on the size of our relatively small state; however, compared to the other 49 states in our union, New Jersey is in the bottom five as far as breweries per capita.
Part of the reason why the state ranks so low is the amount of regulation on micro (or craft) breweries in New Jersey. Many in the industry see the bulk of these regulations as archaic. Some have even pointed out that they prohibit breweries from prospering while catering to restaurants, which, by the way, pay an extraordinary amount for their liquor licenses (a debate for another day). Neighboring states like New York and Pennsylvania have far fewer brewery restrictions and provide more opportunities and incentives. These states tend to foster the industry in a way that benefits the breweries, the local communities, and the states.
So here is a quick history lesson:
In 2019, the ABC (Alcoholic Beverage Control) issued a Special Ruling. The Special Ruling limited on-site events (twenty-five per year), private parties (fifty-two per year), and off-premises events (twelve per year) for breweries. In addition, it limited the sale of food and specialty cocktails and even prohibited collaboration with food-truck vendors on brewery premises, among other things. You may say, “big deal, it’s a brewery, not a restaurant or entertainment venue.” Many breweries still take the approach that they are just that, a manufacturer and distributor. They make beer, distribute beer, and may even have a tasting room that gets crowded on Fridays and Saturdays with loyal patrons (but not for happy hour, those aren’t allowed either). But many of these breweries have become known for hosting events and being part of the communities they, quite literally, serve in.
Fast forward to early 2020. As COVID-19 took hold of our state, country, and the world (it always goes back to blaming COVID, doesn’t it?), regulations were actually relaxed for the NJ brewing industry. As non-essential businesses had to shut their doors to the outside world, and people were just hesitant to even walk into an enclosed space, lower their mask, and imbibe, brewery owners got creative. They created outdoor spaces with tents, started home delivery services, and were able to host more events.
For example, one of my local breweries has a small stand at the local farm where they sell their canned beer to patrons who frequent the weekend events that the farm hosts. They sponsor the town’s Oktoberfest and other holiday events throughout the year.
They have gotten extremely creative in order to expand their business from a manufacturer and distributor into an evolving entrepreneurial business that is continuing to expand its product offerings and identify innovative ways to get beer into more people’s hands and households.
Relaxing the Special Ruling greatly boosted the businesses in the industry. While COVID has subsided to a great extent (although on the uptick as of the time of writing this article), breweries largely have been able to take advantage of having less burdensome rules in place…until now.
The next chapter of the Special Ruling saga continues. As of July 1, 2022, the “relaxing” of the 2019 Special Ruling has officially ended, and these regulations are back in place – and will be enforced (or at least, the state will attempt to enforce the regulations). As a result, breweries will again be restricted as to the business they can conduct, limiting their growth and profitability.
Organizations, such as the Brewers Guild of New Jersey*, continue to fight these restrictions and seek to find a middle ground with legislators in New Jersey. While they certainly have an uphill battle on their hands, they are hopeful.
As a professional service provider, a leader in SobelCo’s Food & Beverage Practice, and an avid beer drinker, it is not my prerogative to take a political stance in such matters. However, when legislation negatively impacts an industry we are passionate about, it is difficult to sit on the sideline without speaking up. We hope that a middle ground can be found between the brewing industry, legislators, and those with other common interests so that these local businesses can continue flourishing.
*The Brewers Guild of New Jersey was established to better represent the policy interests of New Jersey’s pioneering independent craft breweries and brewpubs in the region’s ultra-competitive alcoholic beverage market. The Guild’s Membership is the foundation of today’s flourishing New Jersey craft beer industry which has grown exponentially in the last decade. Our Brewery Members positively stimulate local economies and have earned national recognition for their critically-acclaimed ales and lagers. Find out more on their website www.brewersguildnj.com.
