Editor’s Note: This is my take on the release of the Special Ruling. These thoughts are mine, formed with help of speaking with 7 brewery owners and several other people in the industry today. This is my initial take of what I believe the rules are, if there are errors it is due to the ambiguity of the ruling that, I and many others feel, needs some more clarification. Enjoy the piece and let me know what you think!
Well it has happened. David P. Rible, New Jersey Director of the Division of Alcoholic Beverage Control, has handed down his special ruling effective September 21st, 2018 that will change the landscape of how a brewery can operate it’s business. While some of the language of the Special Ruling will need further clarification ( Editors Note: After speaking to many brewery owners there are still some grey areas), but we are going to break down the changes the way we see them. As of this date, I have spoken to at least 7 brewery owners of various sizes and ages about the new rulings and will use that background when explaining the new rules, and how they feel they will be affected by them.
First of all, I find this statement very telling:
In passing the 2012 amendment, the Legislature intended to promote the craft beer industry and create a demand for these products by the consuming public. The expectation was that the increased demand for craft beers would generate greater retail sales of these products at licensed consumption and distribution premises. Accordingly, the law was enacted to require consumers to take a tour of the brewery, to sample the beers produced on-site, and then to purchase them as package goods for off-premises consumption or for on-premises consumption at a Class C licensed premises. The 2012 amendment was not intended to establish a new consumption venue at the brewery, with the same privileges as a sports bar or restaurant.
Over the past year, I have visited numerous limited breweries, met with and spoken to various stakeholders, including the different tiers in the alcohol industry, and have analyzed the issues facing the growing craft beer industry. As a result of these visits, meetings with stakeholders, and discussions with the owners of the breweries, it has become apparent that there is significant confusion in the industry regarding what constitutes an appropriate tour and what constitutes permissible activities that may take place on a licensed premises, particularly in the tasting rooms of the limited breweries. Although it is clear that a tasting room at a limited brewery is not a new consumption venue with the same privileges as a Class C plenary retail consumption licensee, it is also evident that the brewery has limited retail privileges granted by the Legislature
I want to know where was this “evident”? Let’s break it down.
Clearly, the 2012 Amendment has been met with several different interpretations. The most maddening thing about the 2012 Amendment is that it really doesn’t tell you much more than this:
- to brew any malt beverage, not in excess of 300,000 barrels (31-gallon barrels) per year
- to sell to wholesalers and at festivals in the state
- to sell and distribute out of state
- as part of a tour, sell beer for on-site consumption
- to offer samples to visitors
- to sell up to 15.5 gallons of beer (i.e. a keg) for consumption off-premises
- sale of food is absolutely prohibited
- to maintain a warehouse
Initially the rules were followed without any interperetation. You opened, you did tours, you sold beer. As the number of breweries continued to grow and the popularity started to skyrocket, you started to see breweries holding events to bring people in to their establishment. Music, TV, Quizzo, Yoga, Craft Classes, Painting Parties, etc started to pop up all over New Jersey Breweries. These events were held in addition to following all of the above rules, and grew immensely popular. Something else was happening, breweries started to become vital to the community. Want to know what is going on in your town? Visit the local brewery. Want to know the skinny on the best restaurants? Visit you local brewery. Breweries were hot. Towns were changing their laws to allow breweries to be built within city limits (Pitman and Haddonfield, both traditionally dry towns, both changed laws to do this) and they were prospering, changing downtowns and being key businesses in raising money for local charities, letting their space be used for events, and earning the town revenue. People were starting to take notice.
Fast forward to 2016. There are now around 70 Breweries in the state and they are making inroads on taps in bars, shelf space in liquor stores, and have spawned other businesses and blogs (like this one). Craft beer was growing in leaps and bounds and we started to see some push back from bars and restaurants who felt that breweries were overstepping their bounds. Mostly they were isolated incidents and the majority of the bar and restaurant owners embraced craft beer and had many of them on tap in their establishments. As the breweries continued to grow, we started to hear more complaints from liquor liscense holders that were upset with the breweries that were, in the words of one owner I spoke to, “acting like sports bars”. I had a pretty heated conversation with him, explaining that his license was worth something, that he could sell anything he wanted, and that he was himself selling craft beer at his bar. When I mentioned that breweries had to make everything that they sold he still wouldn’t budge. This is the moment that I saw all the rainbows and sunshine on craft breweries was starting to wane in the eyes of distributors, liquor license holders, and big beer. Oh yeah, big beer started to lose market share, don’t think for one second that their lobbyists are not involved in the new rules. So here we are in 2018 with almost 100 breweries and nearly 20 more in development and the hammer has come down.
So here are the changes:
- In the case of on-site activities, such as trivia night, paint and sip, live music, live sporting events and yoga night, etc., a Limited Brewery licensee will be permitted to hold a total of twenty-five (25) events per license term on the licensed premises of a Limited Brewery..The e-notification shall be provided to the Division by the Limited brewery at least ten (10) days before the special event is scheduled to occur
Goodbye unlimited music, Quizzo, painting, etc. You now are limited to 25.
- I have determined that a Limited Brewery is eligible to receive a total of twelve (12) special permits per license term for events held off of the licensed premises, as either an extension of the licensed premises (“Limited Brewery Extension of Premises Special Permit”) or completely off of the licensed premises (Limited Brewery Off-Premises Special Permit”)
This is actually something that is new. You will be able to hold 12 off premise events as an extension of your licensed premises. The owners I spoke with see this as a benefit, although it remains to be seen to what extent these permits will allow you to do.
A Limited Brewery Licensee may allow a maximum of 52 private parties to occur on the licensed premises, such as birthdays, weddings, anniversaries,civic/political functions, professional/trade association events, class reunion/alumni events, provided the following conditions are met:
a. No alcoholic beverages, except those malt alcoholic beverages produced by the Limited brewery on-site, may be sold or served at a private party;
b. If the host of a private party brings food onto the licensed premises of the Brewery, she/he shall remove all food at the end of the party;
c. A private party may be held in an area on the licensed premises of a Limited Brewery, provided that such area is clearly separated from the tasting room by a permanent or temporary structure and is not accessible by or to the general public. Under no circumstances may a member of the general public enter the separate area of the private party, and the Limited Brewery licensee is responsible for ensuring that only private party guests are permitted in the area separated off for the private party;
d. Tickets shall not be sold to attend a private party, nor may the event be advertised to the general public;
e. The Division may request a copy of the contract between the host of the private party and the Limited Brewery licensee;
f. A Limited Brewery licensee shall provide to the Division a post-event accounting for every private party held on the licensed premises, which may include but not be limited to,the guest list and the amount of alcoholic beverages sold.
Is this even worth it? I feel like the hassle that is involved in this will immediately make some breweries decide to just not have any of these events (this was also affirmed by a few of the owners we spoke to)
The holder of a Limited Brewery Off-Premises Special Permit or Limited Brewery Extension of Premises Special Permit shall not be permitted to:
- Provide food, except as otherwise permitted in Section 6(c), operate a restaurant, or coordinate with any food vendors to sell food in the areas designated by the permit. However, nothing stated herein shall prohibit individuals attending the event from bringing food into the area designated by the permit;
- Sell any other type of alcoholic beverage or sodas, except those produced on the licensed premises of the permittee
- A Limited Brewery licensee may offer for sale or make gratuitous offering of de minimis types of food as an accommodation to patrons, such as water, pre-packaged crackers, chips, nuts and similar snacks.
So no food except small pre-packaged good like chips, peanuts or the like. Also NO MENUS in the tasting room! What does that accomplish? It further distances the community from the brewery. If you took a poll of everyone in NJ about this I bet that it would be a landslide in favor of allowing menus. This is baffling!
- Background music, radio and television may be provided on the licensed premises. However, no live music, DJs or television programs,movies or sporting events, pre- recorded or otherwise, may occur on the licensed premises unless the Limited Brewery licensee provides e-notification to the Division pursuant to Section 3(b),above, and does not exceed the 25 authorized on-premises special events per license.
Saw that one coming.
So these are the new rules. No food or food trucks. No Quizzo, TV, Live Music, Sporting Events, SODA (unless you make it), MENUS (REALLY?), Yoga, Adopt-A-Pet events, etc. UNLESS IT IS ONE OF YOUR 25 PERMITS PER YEAR!
This is really going to hurt folks! People have poured their life savings into a business that has changed it’s rules mid-stream. I fear that we will see people going out of business or severely limiting their hours. I see people who are employed by these breweries losing their jobs because ownership will not be able to support them. I see a state that has succumbed to the wishes of Big Beer and the Bar and Restaurant Lobby. I see a division of the state that is trying to slow down progress for political reasons. Prove me wrong!
What can you do? Keep supporting your local brewery and the businesses that support it. Make your voice heard by your legislator, it is the only way that you will be able to change this ruling. It is clear that the ABC has shown where their loyalties lie.
Of course this is just my opinion, but I don’t think that I am that far off.
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