Good news is a brew for New Jersey craft beer advocates. In February 2018, the New Jersey Assembly’s Agriculture and Natural Resources Committee paved the way for the introduction of Bill A2196, which would remove a current licensing rule requiring breweries and distilleries to provide a tour of their facilities before serving alcoholic beverages to consumers. Currently, breweries holding a New Jersey Limited Brewery License are prohibited from selling their brews at the brewery, unless patrons first complete a tour of the premises. This requirement applies to every customer, regardless of whether it is their first or fifteenth visit to a particular brewery, and failure to issue a tour can result in a hefty fine. If passed, Bill A2196 would be the latest step in a number of recent legislative changes aimed at easing New Jersey’s complex and stringent liquor laws.
New Jersey craft beer production has exploded over the past four years. As of February 2018, the New Jersey Craft Beer Association has identified ninety-eight breweries and brew pubs in the State of New Jersey, as well as twenty-four “startup” breweries in the process of obtaining licensing or permits. The growth of craft breweries in the State is in no small part due to a trend in Trenton towards loosening the State’s strict liquor laws by steadily expanding the rights for breweries with Limited Brewery Licensees.
Prior to 2013, breweries were limited to selling their products to licensed retailers and wholesalers. If a brewery was interested in establishing a tasting room, it would be required to obtain a special permit—issued by a different regulatory agency—that limited service to 4 oz. samples. Then, in December 2013, a noticeable shift in policy took hold when the Limited Brewery License was amended to consolidate these laws and permit the consumption of full-sized beers on the premises. The amendment permitted breweries to sell their brews on site for consumption, but only if such beverages were offered in connection with a brewery or distillery tour.
The 2013 amendment was heralded for allowing breweries to open full-fledged tasting rooms for the public, but the tour requirement ultimately proved to be a burden as it dampened the customer experience and limited the ability of small craft breweries to operate effectively. For those familiar with the New Jersey craft beer scene, the tour requirement has resulted in unenthusiastic sermons on the functions of a beer kettle or a science lesson on the wonders of fermentation. This serves only to delay the true purpose of visiting a local brewery: socializing and tasting. With each repeat visit, customers are bound to find the tour an unnecessary redundancy. Those entering their local craft brewery for a pint are often there to relax, and therefore prefer to spend their time sitting with friends rather than walking a storeroom.
The tour requirement has been criticized by many of the brewers as well. When required to give a tour prior to sale, a brewery must be equipped to handle service in a bustling tasting room while simultaneously provide tours to each new customer that walks through the door. As a result, craft breweries—most of which are owned by small entrepreneurs—find themselves forced to pay for additional staff and must design their tasting room around the tour. To make matters worse, breweries in surrounding states such as New York & Pennsylvania are free from these regulatory encumbrances, thus placing New Jersey brewers at a disadvantage.
Bill A2196 seeks to push New Jersey’s brewery movement further. By doing away with the tour requirement, breweries can now open their taprooms directly to customers without requiring a personal walkthrough of the premises or a lecture on the brewing process. Breweries would be able to focus on improving their taprooms, optimizing staff, and bettering the overall brewery experience. Most breweries are still likely to offer tours, but on a schedule that suits the schedule and finances of a small business owner.
This proposed amendment would prove to be a valuable, but merely incremental, step in the movement towards alleviating breweries of New Jersey’s regulatory restraints. Breweries remain subjected to a variety of regulations that are sure to be challenged as the craft beer industry grows, including those that control their location, production, tasting, suppliers, and sales.
As home brewers continue to leave their garages and pursue their passion at a commercial level, New Jersey’s liquor laws will remain an important roadblock in the development of each new craft brewery. New Jersey beer advocates can expect to see some favorable changes to New Jersey’s Limited Brewery License, but the production of craft beer is still likely to remain a complex, well-regulated industry. For those just venturing into this expanding market, it is recommended that you consult with an attorney familiar with the local, state, and federal regulations affecting your target location. Lindabury’s Food & Beverage group has advised several New Jersey craft breweries and assisted in their progression from idea to operating business. The passage of bills such as A2196 will help develop New Jersey into a brewery-friendly state, but require careful consideration for growing breweries to ensure continued compliance.