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Governor Philip D. Murphy,
Lieutenant Governor Sheila Y. Oliver,
President of the State Senate Steven M. Sweeney,
Speaker of the General Assembly Craig J. Coughlin,
I am writing you today regarding the Special Ruling issued by the State of New Jersey Division of Alcoholic Beverage Control on September 24, 2018 that severely harms the way breweries may interact with their customers and communities in their tap rooms. This Special Ruling will set New Jersey back in terms of beer culture, tourism, industry competition, and disproportionately harms specific segments of the industry including small producers, nanobreweries and new brewery ventures.
In New Jersey, over the past six years, there has been a revolution in our native (in-state) production of Craft Beer by Limited Brewery License holders following legislative reforms passed in 2012. Prior to these reforms, visitors to breweries were limited to a few free sample ounces and producers were not able to engage consumers or ambassador their brands in a competitive manner compared to every surrounding state bordering New Jersey.
This growth in New Jersey’s Craft Beer Producers can be attributed, in large part, to the bills S-641/A-1277 passed in 2012 (which became law in NJSA 33:1-10(1)(b) is known as the “2012 Amendment”). This legislation made it possible for license holders to sell beer for consumption on premises in conjunction with a tour and allowed breweries the tools to build their brands in a competitive manner to out-of-state producers.
The benefits of the 2012 amendment can not be understated as breweries have helped:
- revitalize communities and business districts;
- increase tourism in their respective municipalities;
- created secondary manufacturing jobs in communities reliant on service industry work;
- provide multiplier benefits to neighboring businesses, restaurants, shops, and licensed retailers.
There has been no “one size fits all” mold for a craft brewery. Breweries of all sizes have opened throughout New Jersey – from large regional producers that have turned vacant warehouses into productive ratables, to small nanobreweries that filled “Main Street” vacancies. Even the smallest Main Street nanobreweries have bolstered the “Shop Local” movement and breathed new life into their respective hometowns.
New Jersey beer brands have moved into space once occupied by non-New Jersey brands at retailers and small scale brewery tap rooms push the limits of experimental beer styles, winning national awards & recognition in the process and becoming vital components of the economic resurgance within many New Jersey towns.
On Monday, September 24, 2018, NJABC Director David P. Rible issued a “Special Ruling Authorizing Certain Activities by Holders of Limited Brewery Licenses” (available online at https://www.nj.gov/oag/abc/downloads/Special-Ruling-Authorizing-Certain-Activities-by-Holders-of-Limi.pdf or at this alternate mirror) that:
- severely restricts on-premise events, including a cap of 25 annually that does not reflect limits placed on any other alcohol producers (such as wineries and distilleries);
- arbitrarily limits the ability of license holders to interact and engage consumers in a postive manner, such as a limit of one weekly private event that can be held at the brewery (for a total of fifty two annually) unlike any restrictions imposed on other New Jersey alcohol producers;
- creates friction in the brewery-consumer relationship by imposing new requirements for private security and a requirement that guest lists must be submitted to regulators following each event, private or not;
- harms the ability to encourage responsible consumption by prohibiting non-alcoholic beverages such as soda for sale to guests or provided for free to designated drivers at each brewery premises;
- further harms the ability to encourage responsible consumption by prohibiting menus for restaurants on the licensed premises;
- interferes with a brewery’s ability to promote and expand their brand directly, including limits on private tasting events and the ability to partner with neighboring businesses such as restaurants, bars, and retailers unlike the lack of similar restrictions for other alcohol producers within our state;
- impairs the ability of a brewery to support local, native New Jersey artists by prohibiting “pop up”-style events and other related functions;
- impedes brewery relationships with their communities including local non-profit entities, educational entities, and municipal relationships themselves by limiting the ability to host fundraisers, business association meetings, trade association events, and charitable events as part of the new “On-Premises Special Events” included in the annual cap of 25.
The Special Ruling states that it is necesary to balance competing statuatory declarations between fostering moderate and responsible consumption with trade stability in the industry. This special ruling instead creates an imbalance in the industry instead, with favorable treatment given to non-beer producers, wholesalers, and retailers compared with restrictions on Limited Brewery License holders. The legislative intent of the 2012 amendment is not a continuation of the status quo prior to its passage, but the allowance of new retail behaviors that foster growth in our native New Jersey beer production. These behaviors include on-premise tap rooms similar to those that existed and continue to exist in every bordering state surrounding New Jersey.
We who sign here support the Limited Brewery License holders (the Craft Breweries) to continue the growth and success story of the New Jersey craft beer industry since the 2012 Amendment’s passage. We believe that special ruling as written is unnecesary and contrary to the clear legislative intent of S-641/A-1277. We further believe that New Jersey, being a strong home rule state, should delegate these decisions to the local, municipal level, under existing laws and regulations, and need not be restricted in these new ways by the New Jersey Division of Alcoholic Beverage Control. We believe that tap rooms at Limited Brewery License holders are not new consumption venues as asserted in the Special Ruling, but the scale of activities on-premise prior to this Special Ruling is integral to the success of each license holder including the wholesale sales channel as intended by the 2012 Amendment.
The Special Ruling as written creates a “one-size-fits-all” approach, unwarranted economic hardship on the regulated entities, and needlessly undermines the continued growth of the microbrewery industry, as well as the many direct and indirect economic benefits they convey to their municipalities within which they are located, and we who sign here oppose the provisions of this document.
We who sign here ask that the Special Ruling be withdrawn and that an open process with stakeholders including the five hundred sixty five municipalities located within New Jersey commence to replace the closed proceedings that led to the drafting and release of the
“Special Ruling Authorizing Certain Activities by Holders of Limited Brewery Licenses” on Monday, September 24, 2018.