Microbreweries In Peril Due To New NJ Restrictions, Industry Says

NEW JERSEY — For the past few years, microbreweries in New Jersey have continued to grow in the face of the pandemic and inflation. But new state-imposed restrictions put those businesses in peril, according to industry leaders.

The New Jersey Division of Alcoholic Beverage Control (ABC) issued new rules, which went into effect last Friday, that significantly limit activities on the premises of microbreweries. As a result, the establishments can only hold up to 25 on-site events and 52 private parties per year. Each business can attend up to 12 off-site events.

The regulations also require microbreweries to only let patrons consume their products on-site if they've taken a tour of the brewery. Repeat customers don't have to take a tour if they've gone on one in the past year, but they must complete one annually and the business must document that they did so.

Restrictions listed in the state's 24-page special ruling also include the following:

• No selling food or collaborating with a local food vendor. Microbreweries may provide menus from local restaurants, but they can't have an exclusive relationship with them. Microbreweries can only serve "de minimis" types of foods, such as nuts or packaged crackers.
• A microbrewery can only have two television screens — none larger than 65 inches. Businesses with more than two screens can only use the extras to display information about the brewery and its products.
• No happy-hour or specially priced drinks on-premises, no mixing specialty cocktails, and no brewing or selling coffee.

The state's directive explains that limited-brewery licenses carry different privileges than those of bars or restaurants. The ABC — part of the New Jersey Office of the Attorney General — says it "must balance the concerns of the growing limited brewery sector comprised of 100 licensees against the issues and concerns facing the bars and restaurants that collectively hold approximately 6,000 retail consumption licenses" in New Jersey.

The ABC says that microbreweries who want to focus more on promoting consumption on their premises in tasting rooms, rather than creating products for widespread wholesaling, should couple a limited-brewing license with a plenary retail consumption license, which allows businesses to sell alcohol for on-site consumption.

New Jersey had the nation's fastest-growing craft-beer scene from 2015-18, according to C&R Research. Within that span, New Jersey's craft-beer industry grew 43 percent, as craft breweries and microbreweries grew their presence within the state and around the nation.

The ABC originally tried to impose the new restrictions in September 2018 but suspended them a month later after an outcry from the industry.

The Brewers Guild of New Jersey — an industry group representing craft breweries and brewpubs — says the new restrictions will hurt small businesses.

"Our guild remains hopeful that the Murphy Administration will recognize the need for reform in the wake of the pandemic to keep our local beer industry growing," said Eric Orlando, the guild's executive director. "We hope forthcoming regulations issued by NJABC later this year utilize our recommendations for the good of the dozens of small businesses which make up the state’s craft beer industry. While we understand the NJABC is only empowered to enforce the laws as written, our guild believes the imposition of these broad conditions at this juncture by the Division is extremely problematic and need to be remedied."