New Jersey ABC offers up new Special Ruling, limiting craft brewery events, food and beyond

I’ve been traveling, so I’m just getting to this now, but in late May, New Jersey’s Division of Alcoholic Beverage Control laid out some particularly irksome new rulings for craft breweries. Over the last year, the New Jersey ABC has been back and forth on a variety of local regs surrounding craft breweries — events, food service and other issues that will cause a lot more red tape and no-nos for beer-makers — but again it’s a game of licenses.

Here’s how it works: Craft brewery license cheap, liquor or food license expensive, everybody angry with each other. From the ABC press release:

“We spent months meeting with stakeholders and listening to their concerns, especially the very few, very vocal licensees who felt their views were not adequately represented in the extensive stakeholder discussions we held prior to drafting and issuing the first Special Ruling,” said James B.. Graziano, Acting Director of the Division of Alcoholic Beverage Control. “The Special Ruling issued today includes important changes that address key issues raised in these recent discussions. The changes made are intended to help craft breweries promote their products and build their business while continuing to balance the concerns of other licensees and ensuring compliance with state law.”

The New Jersey Division of Alcoholic Beverage Control wants “limited brewery licenses” to realize they do not hold a bar license and that they are not restaurants. It should be noted that a limited brewery license only costs a couple of grand, while alcohol licenses in the state can cost up to $1 million. You can understand why bars and restaurants might find the playing field uneven. Indignant voices are technically correct that these new we’re-trying-’em’-out regs will cause more headaches and limit growth for breweries, while neighboring states like Pennsylvania definitely have more supportive regulations for beer-makers.

Under the new Special Ruling, craft breweries are still subject to a 25-per-year limit on “special events” that can be held on their premises, but there’s more leeway now. Events such as trivia nights, craft making, animal adoption events, yoga or other similar types of classes will not be counted as “special events” unless they are advertised or promoted in the media. The New Jersey Brewers Association released a statement hailing the ruling as a step toward modernizing the Garden State’s liquor laws, while leaving the door open for more change. From the statement:

“It is clear that Director Graziano and his staff have made thoughtful and deliberative changes to the 2018 ruling in response to the many conversations they have had with the members of the alcohol manufacturing and sales community. This ruling also acknowledges the growing demand for craft breweries in this state, and their increased role as community partners. In short, the Association views the majority of the Special Ruling as positive for the industry.

To……

“Thus, it is now vital that the Legislature clarify the legislation. It is ultimately detrimental to the economy to unnecessarily hamper business models that have been overwhelmingly propelled by and beneficial to the residents in this state with arbitrary limits on events that have been deemed appropriate for these venues. The New Jersey residents themselves have been vocal about their desire to see the brewery culture in this state continue its growth unhampered.

“The Association believes that to accomplish this goal there are a number of fixes that could be made to prevent this type of piecemeal regulation, and calls on legislators to look at a comprehensive package of legislation that would protect the growing craft beverage industry in New Jersey. The only true, permanent fix is for the Legislature to clarify their own legislative intent in creating these retail consumption spaces, and to act to modernize the entire liquor license process in the state.”

Of course, it’s not just events being limited here. It’s food service, it’s the sale of beer to patrons, it’s private parties and beyond. Among other notable changes:

• The new Special Ruling eliminates a ban on food deliveries to limited breweries and allows owners to provide patrons with menus from local restaurants.
• Private parties are capped at 52 events a year – as they were under the previous Special Ruling, but now party hosts are permitted to bring their own wine and beer to their events, if the establishment allows it. This allows owners to market their facilities as party venues to individuals who may not want to be limited to serving craft beer.
• Limited breweries are required under State law to give patrons tours of their facilities before serving them. However, under new language, a tour will be required only once a year for repeat customers as long as the brewery creates and maintains a record of customers’ previous participation in a tour.
• The definition of “tour” is redefined from the previous Special Ruling to make interaction between Limited Brewery licensees and their patrons more substantive and meaningful.
• The new Special Ruling confirms that Limited Breweries may allow up to 25 social affair events to be held on their licensed premises in accordance with existing law.
• Limited Breweries may participate in 12 off-premises events with a permit issued by the Division that would allow them to sell beer in open containers at civic or community events. Unchilled 4- or 6-packs of beer may be sold for consumption off of the event premises.
• The statutory requirements of New Jersey Liquor Laws limiting sales of any product for on-premises consumption to only those individuals who have toured the brewery and prohibiting the Limited Brewery from operating a restaurant and selling food (other than de minimis types of food) will be enforced immediately by the Division. However, the remaining provisions set out in the Special Ruling should be considered guidelines and will not be strictly enforced by the Division at this time, barring flagrant or repeated violations.
• In the near future, the Division intends to engage in a formal notice and comment period pursuant to the state’s rulemaking process and will propose these guidelines as regulations. Upon adoption, the guidelines will be fully enforceable with respect to all Limited Brewery licensees.
• Until such time as the regulatory process is completed and regulations are adopted, the Division intends to treat the guidelines contained in the Special Ruling as special conditions on each Limited Brewery licensee, beginning with the 2020-2021 license term.