The end of the craft brewery industry?

What a shame...they really are trying to destroy a good thing

Nearly eight months after a rush of pushback forced the state to pull back on a slate of restrictions aimed at regulating what craft breweries can and can’t do, it’s trying again. The Division of Alcoholic Beverage Control, a department under the ...
http://www.lehighvalleylive.com/news/2019/05/no-food-trucks-and-annual-tours-craft-breweries-in-nj-now-have-a-new-set-of-rules-to-follow.html

Bug3
May '19

Breweries, Farmer's Markets, all having to bow to the political pressure from the competition, this time restaurant/bar owners, as having some sort of unfair advantage due to a difference in licensing fees and rules. Instead of making the licenses/fees/rules equal, the regulators keep those the same and plaster some new RESTRICTIONS on the breweries.

There are 6,000 liquor licenses in NJ; there are 100 brewer licenses.

Hopefully our brewers can still prosper under the new rules which are less draconian than the previous version. Have to hear from them. There is also a new rule allowing brewers to attend 12 off-site events per annum for a $200 permit where they can serve and sell ---- beer! BID --- get crackin!! Summer on Main Street might suddenly take a new twist!

strangerdanger strangerdanger
May '19

what kills me is that the craft brewers supposedly agreed to these compromises when in all actuality, they shouldn't have agreed to a damn thing. IMO, of course.

Joe Friday Joe Friday
May '19

Nanny state NJ at it again. When things are so broken in Trenton the only thing left to do is divert and attack craft brewery's.


This is what you get when Democrats are in control. It's a shame.

Metsman Metsman
May '19

Sure because 8 years of Christie, a Republican, were so fruitful and invoked so much positive change. Please, they all suck. Republican's aren't the answer to anything. The whole party system is broken and a sham. Fools buy into it. So go ahead and root for your team. You can continue to sound like a disgruntled Mets fan.

There is just too much government, period.


It has nothing to do with republicans or democrats. It is all about the NJ restaurant/bar industry lobby looking to protect their interests and weaken competition.


if breweries think they have it bad, how do you think the medical marijuana growers feel? There are far more restrictions on them and they have a useful product that heals the body, while breweries have a product that only winds up sickening the body .

Pcisnt4me Pcisnt4me
May '19

"It has nothing to do with republicans or democrats. It is all about the NJ restaurant/bar industry lobby looking to protect their interests and weaken competition." -Jono

#winner

Joe Friday Joe Friday
May '19

it’s like Uber / lyft vs medallion cabs who spent thousands not over a million as a barrier to enter a market. I don’t know how much craft breweries are disrupting the industry in NJ but I can understand why the current players are upset.

Skippy Skippy
May '19

Skippy,

The current players may be upset, but it is not the government's role to throttle stifle competition. The only say the Gov't should have in this game is to ensure proper health and safety regulations are followed. Baring that, the State gov't should have no say what so ever on what a brewery wants to do to get the public interested in their product.

jnnjr jnnjr
May '19

+1 Jono --- others talkin out of their hats...…it's the restaurant/bar owners exerting leverage, not the dems or repubs. Same thing happened to the farm stands from groceries/mini marts.

Turns out if you made all things equal, many a brewery would not exist.

Are the "players" really upset? Seems the new regulations are much watered down over the original clusterfarce. And they added the "off-site" venue possibility. I mean one man's off-site is another man's next door lot...….or Main Street.....or Spring Fest...….or Motor Madness.....

Could be a plus.

By the by: STOP the politics now or prepare to be trumped!!!

strangerdanger strangerdanger
May '19

Doesn't the gov. make money from the liquor licenses? if so, it's way too late to let the breweries operate freely.

Reggie Voter Reggie Voter
May '19

Agreed jnnjr - but once a the license requirement was established the way it was in NJ it’s difficult to now set up a lower barrier of entry for a specific class of retailer. Assumedly the government owes some manner of debt to licensees who followed the rules they established. As SD stated this is most likely a moot point due to the low number of craft brewer licensees - it may have a deminimis effect on the other 6000 licensees

Skippy Skippy
May '19

I would agree that the gov't owes some manner of debt to the licensees who followed the rules they established when the license was procured. These rules were not in place when places like Czig and Manskirt opened up and received their license. Now, they have to change their business model because the State wants to change the rules after the fact. If they want to create a new license under these restrictive rules for new breweries, that's fine, but people with established businesses should be able to operate under the rules when their business acquired that license (assuming, of course, we are not talking about health/safety issues).

jnnjr jnnjr
May '19

Regardless of which side of this you are on, the end result is going to be less taxes from the breweries. I go to Breweries cause they have a different selection of beer. Good for the Brewery. Being able to eat from a food truck in the parking lot makes it easier, and the food truck makes money. Now, I will just have to go to a restaurant and get take-out.

Less on-site events + Less events to sell their goods at = less income = less taxes paid.

I think the breweries in towns will still thrive and do well overall, just not as well. The breweries that are off the beaten path will have more of an issue with it. The food trucks will now have a permit to park on the street that the brewery will just happen to be on. HTown better allow that if it doesn't already.

PickleNJ PickleNJ
May '19

You know, sometimes for new markets, we don't establish "normal" rules n regulations and sometimes specifically lower the bars to entering the market. Fact is they did establish a license, with license rules, attempting to ease the entrance into the brewery market. In the scheme of things, in comparison to other states, NJ did well, didn't knock it out of the park, but created a pretty nice market.

Now I am sure that many of the 6000 liquor license holders cried "foul" and "they're eating our lunch, but not paying their dues."

If you want, we can just make it equal, let them get a liquor license and play the regulation game that way.

But most would collapse very quickly.

This is actually a compromise, much better than the original, even has the off-site perk. I think everyone agrees this is a better plan, has some perks, and I am guessing most will find it workable.

strangerdanger strangerdanger
May '19

Are they in the manufacturing / wholesale beverage business and using the events for promotion? Then the regulations seem fair - what is being prevented is craft breweries opening as restaurants that serve as the primary business model.

The same rules have always existed for larger distilleries and breweries - hence why their promotional events are limited in number on site (eg flight tastings etc) and are normally held in licensed establishments that sell their product. I’m all for less legislation and government regulation but at the point when you are holding weekly private events and bi-weekly public ones with entertainment you’re now competing against licensed venues. I can see the point.

In other states (NC for example) we have craft breweries that operate restaurants and bars - they’re separately licensed businesses and the product is double taxed (once from the ABC on manufacture and at the point of sale) - the difference is there is not a limited amount of licenses. Fix the arcane liquor license system in NJ because that’s the problem and everyone is happy and more taxes are collected.

Skippy Skippy
May '19

One of my sailing and drinking buddies – a redundancy if there ever was one - is a baker. Among the baked goods he produces are Bavarian pretzels. They go well with beer, so on occasion he shares some with a friend who runs a microbrewery. Who kne...
http://www.nj.com/opinion/2019/06/pretzel-logic-from-the-state-on-microbreweries-and-the-liquor-lobbys-desire-to-quash-competition-mulshine.html

Bug3
Jun '19

I work for an insurance agency that insures craft breweries, wineries, & small distilleries
country wide. It's not a dying industry, we can't keep up with the work. I believe Skippy is right, NJ needs to fix their licensing system. For you craft beer drinkers, my friends son writes our blog, some might find it interesting if traveling around the US. You might want to read some of his reviews. He tells the history of the breweries themselves,as well as the beer reviews. https://pakprograms.com/hoppy-thoughts/

Bessie Bessie
Jun '19

quote from the joesixpack link
That’s a rule that says microbreweries can serve you beer but they can’t serve you food.
Or in other words, the state wants you drink on an empty stomach, something every expert in alcohol beverage consumption says you should not do.
end quote

Total nonsense, anybody can bring their own food or have food delivered.


Pretzel logic: https://www.nj.com/opinion/2019/06/pretzel-logic-from-the-state-on-microbreweries-and-the-liquor-lobbys-desire-to-quash-competition-mulshine.html

OnTheEdge OnTheEdge
Jun '19

Liquor licensing has so much history that the rationale has become a riddle hidden inside an enigma. And it's not just NJ, most states have arcane systems to being able to sell booze.

I agree that the regulations are byzantine and seemingly done not so much to destroy microbrewery competition but more to protect existing liquor licenses. The result seems to be to hamstring microbreweries from pursuing what might be called "Darwinian" solutions to satisfying customers. As in isn't it just part of our natural evolution to combine beer with food, beer with fun? That's the negative spin on current regualtions that so many here support. And sure, who does not want more beer, more food, more fun for less? (put your hand down Skippy :>)

I am sure Skippy is right about the need to change the entire licensing system, and I am sure he is right on this for many States in the Union. For example, in NC you can only sell between 7am-2am, consumption to 2:30am and you must wait to 12 noon on the Lord's day. "NC alcohol laws are unlike any other in the nation." But they do have plenty of crackers with their beer :>) https://longleafpolitics.com/nc-alcohol-laws/ I will let Skippy tell us how microbreweries fit in that but suffice it to say, NC has created and promoted a very healthy craft brew market, yet a market where each owner is restricted from growth beyond a certain volume. Luckily it is a high enough volume that most are not pushing the ceiling and NC might be King of Craft in the South.

I am also sure that NJ microbreweries don't want to be put on an equal footing with those who own a liquor license because they enjoy the financial benefits of their limited license. Otherwise, they would say, "screw it, I'm getting me a full liquor license." So the micro's screamed at the first law which was draconian but are a little more muted on the compromise.

These laws ATTEMPT to retain the limited license value while NOT granting full license benefits. That's the positive spin. Gotta problem? Then get rid of the limited brewery license and go full-liquor license for all.

However, to Skippy's point, they probably should anoint a Czar, a Commission and then determine a new wholistic liquor licensing system to provides the functional differentiation needed at different licensing levels to adequately serve everything from tasting rooms to full service (limited, full and in-between levels), get rid of private sales of liquor licenses, and just rationalize the entire system taking the non-compete out of the regulations.

While I can not find which state is "world class," when it comes to licensing, here's just a bit of how bad it is: https://slate.com/business/2014/06/americas-booze-laws-worse-than-you-thought.html Remember, NJ micros get a cost break on their license, the question is are the constraints and restrictions aligned with that cost and, perhaps more important, with the reality of beer's natural evolution for combination with food and fun.

strangerdanger strangerdanger
Jun '19

The N.J. liquor license scheme is a great microcosm of our state governance framework: protect your cronies, sprinkle in some outright corruption, everyone else gets a finger in the eye. It’s organized crime by proxy. It was never about regulating alcohol consumption or some other so-called public good. Small businesses revitalizing downtowns and creating jobs? Sorry, this is our turf and I have a commission on my side. No wonder we’re broke and hemmoraging taxpayers to virtually everywhere else in the country.


"It’s organized crime by proxy." Really..... Who's doing the organization? Seems to me it is a long history of bad actors supported by an arcane system. If it was organized crime, why would liquor license sales be private? That's where the big money is. They average $350K and one may have gone for $1.8M. If you can sell it, it's an asset. If you can't, its a boat anchor. But once you have it, it's yours to keep or sell, not organized crime...…

Our system is probably the most restrictive in the nation. The restriction comes from the total amount of licenses available which is population dependent. This started in 1947 and has been raised a few times and if you are below the population threshold, you get one and only one.... Now, you want to open that up? Better satisfy the 7,000+ current holders who spent maybe $1M each to hold their license...… Is that organized crime or capitalism as we know it in NJ?

Now add in breweries that get a reduced rate on licenses and what do you think the reaction of the 7,200 current liquor license holders would be when breweries start looking like bars, restaurants, liquor stores or anyone else who holds a more expensive license? Organized crime or looking to be as competitive as possible under the law?

No, I don't see organized crime, perhaps some cronyism and quid-pro-quo's for greasing the wheels but probably no difference than anywhere else dealing in those types of dollars. Plus, as I noted, while NJ may be extra restrictive, many a state has arcane liquor laws. It's a very old and mature market.

Still say Skippy is right that our system (as well as his) is arcane, but this one will take a Czar, a commission, and one hell of a well-thought-out and well-tested plan to change. Otherwise, you have over 7,000 businessmen, perhaps holding up to $7B in liquor license assets, against you to begin with...... That's a powerful group with a big asset to protect.

strangerdanger strangerdanger
Jun '19

Agreed on both of our systems being arcane

Here’s how we deal with microbreweries

Mason jar lager - has a brewery near me
https://masonjarlagerco.com/
They also have a restaurant / tavern near by (several locations)

http://themasonjartavern.com/

They pay the county $25 for a license for beer / wine
http://www.wakegov.com/tax/business/beerwine/Pages/default.

They pay the state for a license to sell spirits it’s ~ $1500 depending on what you want to do and requires fingerprints etc.

https://abc.nc.gov/Permit/Retail

Then they get the regular business license / sanitary inspections needed for food and boom there you go. We have about 50K liquor licenses in NC.

The brew is taxed for wholesale transfer to the tavern and again at retail POS. They also have a license for manufacture

We passed a brunch bill so you can enjoy a beverage after church

http://ncbrunchbill.com/

Skippy Skippy
Jun '19

Better example

http://aviatorbrew.com/

Here’s another brewery near me

He has a brewery, pizzeria, tap house, and BBQ restaurant on both sides of the street. He has 4 patios - the town made him bring the plane inside - he turned the old hangar into a 23k sq foot bar where he has bands on the main stage. On the weekends he has multiple bands playing at the different venues.

Skippy Skippy
Jun '19

everybody and their uncle knows that pretzels go with beer, the rules are arcane, ridiculous and completely unnecessary,

it is organized crime by proxy without a doubt,

the state bureaucracy is out of control, instead of adding rules to micro-breweries they should relax the rules on liquor lic holders

they always go the wrong direction and they go way too far in that wrong direction, every.single.chance.they.get.

Geesh Luise already with the nonsense

GreyHawk GreyHawk
Jun '19

What is organized crime by proxy? What a strange term.

And who do you think asked for new rules?

I mean, I understand the reason new rules may be warranted starting with the current population control, but, of course micro brews get licensing rules.

StrangerDanger StrangerDanger
Jun '19

Point is how do you fix the current climate in NJ and not disenfranchise a $7B industry who has invested and is profiting from the high barrier to entry into the market - as SD stated there needs to be a czar appointed and a total revamp of the system to be fair to anyone. You can’t just disregard the investment already made - this is what happens when you Jack with a free market.

Some of these craft beers will get you hammered quickly they are all over the spectrum with some in the 4-7 abv range. It’s silly from a public safety standpoint to make that the focus of the visit and hand you a bag of packaged peanuts.

Skippy Skippy
Jun '19

New rules https://www.tapinto.net/towns/westfield/sections/food-and-drink/articles/westfield-microbrewery-mayor-join-uproar-over-new-nj-rules-for-breweries

OnTheEdge OnTheEdge
July 12th

It’s the Alcoholic Beverage Industry leveraging their political donations to lock out the micro breweries.
Plain and simple.
Same reason you have to pay almost the cost of a 12 pack to have a brew at a restaurant.
Personally, I refuse to pay for their fair at best food and rip off beverage prices.
Let them go belly up.

Stymie Stymie
July 12th

I just had a very nice evening out at ManSkirt Brewing. I think these breweries are a terrific way to revitalize towns that are hammered by Amazon and other environment shifts. It's a crying shame that they're getting put into a corner with these limitations when the should be supported by the community and local governments.

Just my .02

friendly mcface friendly mcface
July 14th

"It's a crying shame that they're getting put into a corner with these limitations when the should be supported by the community and local governments."

They are supported by the community and local governments. This is coming from the state level.


There should be the same restrictions on Microbrews like on restaurants & bars. Let the public and marketplace decide instead of the special interests and lobbyists.


It does limit, “25 on-site activities, 52 private parties and attending 12 off-premises events annually” but not eliminate what they can do. I’d like to know why any politician would want to limit? Is it big liquor manufacturing or stores or a restaurant groups protesting. Theres so much for politics to over see why care about this?

Roywhite Roywhite
July 14th

Roy
$$$$$$$$$$$$$

Stymie Stymie
July 14th

Roy, even advertising is limited. So dumb.

3wbdwnj 3wbdwnj
July 14th

Roy the NJ Restaurant & Hospitality Association has a very powerful lobbying arm. Heck their office is just across the street from the State House in Trenton. They pushed hard for the limits as they claim if left unchecked the craft brewery's will harm their business.


So thats the answer Greg, thx. Its all so wrong to limit a business like these. Next restaurants and liquor stores wont be able to sell the micro brews in their businesses, too much competition for big booze companies.

Roywhite Roywhite
July 14th

Jim L, When is the local government going to stand up to the state?


I agree it is wrong for sure. But here we are in NJ and that is par for the course in this political atmosphere. Well ideology actually.


OP check the agenda for tonight’s town council meeting to find the Answer to your question

https://www.hackettstown.net/sites/g/files/vyhlif646/f/agendas/july_14_2022_council_agenda.pdf


Warren County opposes new brewery regulations:
https://www.wfmz.com/news/area/western-newjersey/warren-county-opposes-new-brewery-regulations/article_5c8c361a-02fd-11ed-b797-077aeb05777d.html

OnTheEdge OnTheEdge
July 14th

The rules are more about competition from restaurants and bars than any "big booze".


Roywhite, I don't think it's about "Big Liquor" as much as it is the bar and restaurant businesses who are facing "competition" from microbreweries that pay much less for their type of liquor license ($1,250.00 per annum for up to 50,000 bbl up to $7,500 for 300,000 bbl) than "plenary retail consumption" holders do .

It's not unheard of for PRC licenses to go for hundreds of thousands of dollars on the open market. I understand why the holders would be upset about breweries being allowed to operate under the same operational guidelines as them while not having to be hindered by the same draconian financial restraints...

Personally, I think the 1 license per 7,500 people per town PRC regulation is ridiculous. Every place that serves food should be allowed to serve alcohol without some special license that is for all intents and purposes, impossible to get in this day and age unless you are a national chain.

ianimal ianimal
July 15th

Long Valley, Washington Township (Morris),
"plans to discuss a resolution opposing the New Jersey Division of Alcoholic Beverage Control's special conditions on breweries during its committee work session on Aug. 10."
https://patch.com/new-jersey/longvalley/new-state-brewery-restrictions-challenged-long-valley-officials

OnTheEdge OnTheEdge
August 9th

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