Small Brewers Are Fermenting Hope for Passage of Brewery Law

By Tara Nurin, NJ Spotlight

Artisanal beer brewers around the state are cautiously optimistic about the governor taking action on a bill passed in late June that would greatly expand their ability to market and sell their products.

Supporters say the bill, which passed unanimously in the Senate and by a vote of 64-13-1 in the Assembly, sets a rare example of cooperation and compromise within the alcohol industry. Initially, stakeholders in the wine and spirits distribution and retail sectors lined up to oppose multiple provisions in the original bill drafted by the Garden State Craft Brewers Guild. By the time it passed, only the New Jersey Restaurant Association (NJRA) remained -- and continues to remain -- opposed.

“We worked for two years meeting with distributors, liquor stores, and taverns, among others, and they saw we have good intentions,” said guild treasurer Gene Muller, who helped negotiate a host of changes that eventually facilitated wide endorsement of the bill. “That never happens with liquor legislation in New Jersey because everyone’s got so much turf to defend.”

Among other things, the law, if signed, will allow owners of production breweries -- brewhouses designed primarily for off-premises sales -- to set up both an on-site tasting room to sell pints and bottles to visitors who tour the facilities and a sales room to sell up to half a keg of house beer, up from the current limitation of six packs. Owners of brewpubs -- restaurants that brew their own beer -- who can now operate only two in-state facilities, will be allowed to open 10. They will, for the first time, be able to sell their beer outside the restaurant by using licensed distributors to reach liquor stores, bars, and other restaurants. These brewpubs will also join production breweries in providing samples of their products at festivals and charity events. 

In addition to the Anheuser-Busch InBev facility in Newark that produces Budweiser and Rolling Rock, nine production breweries and 15 brewpubs control the state’s microbrewed beer turf, a total number that’s grown by approximately 20 percent in little more than a year. Though figures aren’t available by state, small-batch beer production in the U.S. is surpassing most other beverages, as evidenced by its 13 percent increase last year. Members of the brewers guild are pleased that they were able to work with critics to avoid alienating most of their competitors and business partners on the way to stretching the parameters within which they conduct their operations.

That, however, doesn’t mean everyone was thrilled.

A Seat at the Table

“When all these amendments were put together, we did not have a seat at the table, and we would have loved one,” said Guy Gregg, who lobbied on behalf of the NJRA. According to Gregg, the association only opposes a single element of the final bill, the one that allows on-premises sales at production breweries. Muller contradicts Gregg’s account of the negotiating process, accusing the NJRA of refusing to compromise from the beginning, despite multiple meetings between stakeholders to attempt to craft a bill that would satisfy or at least mollify everyone involved.

Specifically, brewers made concessions to other liquor industry associations by eliminating provisions that would allow production breweries to sell food or operate exclusive retail outlets. It did the same with "free-standing" resaturants that would be owned but not located within a brewery and would be able to serve alcohol. The restaurant association, however, remained steadfast in its call for an amendment that would eradicate the on-premises sales that it believes poses a threat to its members’ bottom line.

“We don’t want to turn the brewery into a bar,” said Gregg. [Under normal circumstances], in order to sell product for consumption you have to have a C license.”

And those licenses, according to Gregg, are more expensive in New Jersey than anywhere else in the country. Unwilling to risk undermining the value of said license, the association refused to soften its position that drinkers should head to a bar to buy a beer, agreeing instead to allow brewery patrons to sample four-ounce pours after touring the brewhouse or join the public in buying up to half a keg for drinking elsewhere.

Muller, whose Flying Fish Brewing Co. will more than double production when it opens in its new home in Somerdale later this summer, contends that this kind of thinking is shortsighted, since it ignores the reality that breweries are drivers for tourism. And tourists, according to the owner of New Jersey’s largest and second-oldest independent brewery, tend to dine after they tipple.

“[The restaurant association] thinks that every dollar we get is a dollar they lose. We may get a dollar but they’ll get two dollars. After people take a tour they ask us where to go out to eat. And we have a list of places we tell them that sell our beer,” Muller said.

Continue reading this story at NJ Spotlight.com

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