Pending Bills Would Give Big Boost to Garden State's Small Breweries, Distilleries
Easing of restrictions would help fuel continued growth of industry pouring more than $750 million annually into state’s economy
When state lawmakers return to Trenton after the November elections, they’ll have the opportunity to consider a dozen bills that would further modernize New Jersey’s laws governing small breweries, which were overhauled in 2012 for the first time since the end of Prohibition.
The 2012 legislation most notably created a “limited” brewery license for small producers, which allowed them to sell pints in their tasting rooms, and it liberalized rules that govern brewpubs, or “restricted breweries,” where brewers make beer in a restaurant held by the same owners.
The new rules have proven favorable to the micro-distilling industry as well. Not long after Gov. Chris Christie signed the brewery bill, lawmakers created a “craft distillery” license similar to the limited brewery license, which drastically reduced fees for small distilleries and allowed them, like breweries, to sell their products by the bottle and for on-premise consumption -- both straight and mixed into cocktails. Since the implementation of that bill in 2013, New Jersey’s two pre-existing small-batch distilleries have profited by obtaining the new craft distillery license, and nearly half a dozen additional distilleries have opened.
Although members of the small-batch beer and spirits communities lost a staunch ally when former state Sen. Donald Norcross (D-Camden) left Trenton to enter Congress last year, the climate still seems favorable for them, especially because advocates in the Assembly tend to tout these cottage companies as job creators. Republican Senate Leader Tom Kean Jr. (R-Westfield), who sponsored the 2012 bill, notes that since its passage, the number of New Jersey breweries has doubled, indirectly employing thousands of people and making a $776.9 million annual impact on the state’s economy.
Cider, mead and spirits
Two bills have the potential to create the most jobs and fuel the growth of the network of alcohol producers across the state. The first would create a cidery and meadery license, while the second would allow wineries and breweries to distill spirits on-site.
When lawmakers wrote the brewing and distilling modernization laws, they didn’t include cider or mead because a) the honey-fermented and fruit-fermented beverages didn’t yet rank high enough in the national consciousness and b) bill supporters wanted to focus on one thing at a time.
But now that the Alcoholic Beverage Control (ABC) has approved one meadery (Melovino) under a temporary permit “with privileges similar to those of a Limited Brewery license” and one cidery (Twisted Limb) under a winery license, some think it’s time to create one.
The annual fee for this license would be $938 and it would allow for production of up to 25,000 barrels (1 barrel = 31 gallons) per year. Holders of this license, who may already own a brewery, brewpub or winery, could sample and sell under similar rules as craft brewers. This bill shouldn’t have much trouble passing, as it passed the Senate Law and Public Safety committee unanimously and waits for a vote in the Assembly Agriculture and Natural Resources committee, chaired by bill sponsor Bob Andrzejczak (D-Millville).
As for distilling, some winemakers have been clamoring for a change for years. Current law allows craft brewers and vintners to hold a distilling license, provided they use unique equipment located in a separate building. This bill authorizes owners of limited and restricted breweries, wineries and farm wineries to distill within their facilities using existing equipment. Among other advantages, this bill would allow winemakers to use their otherwise-idle equipment during the off-season to distill fortified wines like brandy, port, grappa and eau de vie.
This bill was a priority for Norcross before he left office.
“This is still on my list of items we need to address,” he said shortly after the distillery reform law passed. “We’re trying to open doors for businesses, not close them.”
This new category of distiller can sell packaged liquid directly to the consumer, just as conventional distillers can.
The bill is waiting for a vote in the Assembly Agriculture and Natural Resources committee, of which sponsor Whip Wilson (D-Camden) is vice-chair. It has no companion bill in the Senate.
Farm to table
Four bills relate to farming and dining. One of the farming bills would create new categories for producers that operate on farms and use their own crops as ingredients; the other bill would permit in-state breweries to sell at certain farm markets. The food bills clarify rules that govern eating at breweries and would allow breweries in a few disadvantaged cities to operate on-site restaurants.
The farm brewery/winery bill corrects an omission in the aforementioned cidery/meadery bill to allow farm wineries (wineries that plant at least three acres of wine grapes and source a certain percentage from in-state) to produce alcoholic (or “hard”) cider. More importantly, it would allow existing wineries to brew up to 3,000 barrels of beer using estate-grown ingredients and creates a category for farmers who grow hops or malts to produce up to 2,000 barrels of beer per year.
Farm breweries and winery/breweries could offer samples and sell for off-premise consumption, though neither could sell to wholesalers or retailers. The farm brewery license would cost just $100-$300 per year, compared with $1,200-$7,500 for limited breweries. This bill didn’t go anywhere last session and isn’t doing much this session, although Secretary of Agriculture Douglas Fisher toured Screaming Hill Brewery in Cream Ridge, the state’s first brewery located on a farm, in late August.
The farm market bill is straightforward: It would extend privileges enjoyed by the state’s wine industry to the craft beer industry by allowing in-state craft breweries and brewpubs to sell beer at farmers markets located in municipalities that allow alcohol sales. It’s hard to see much opposition to this bill, especially because Kean, the lead sponsor, traveled to Cape May Brewing Company last month to push for the bill in the media.
The brewery food consumption bill closes a hole that’s caused brewers a lot of confusion and consternation. Though it still doesn’t allow breweries to sell food (the restaurant lobby opposes it), it clarifies that brewers can allow visitors to bring food in from the outside. However, it still doesn’t allow food trucks to park on brewery property, making New Jersey the only state in the U.S. to forbid this practice. The bill enjoys powerful bipartisan support in the Senate and is waiting for action in the Assembly.
A second food bill, however, would create an exception. Written to spur economic development in the four New Jersey cities with the lowest median family income, known as “Garden State Growth Zones,” this bill would allow craft breweries to operate restaurants in Camden, Trenton, Paterson and Passaic. The bill limits the number of these restaurants to three per city. Introduced in both chambers late last year, the identical bills await hearings in committee.
As it stands, brewpubs can currently distribute beer through wholesalers in addition to selling it at their own locations. A bill being promoted by Kean allows them to sell 1,000 barrels per year directly to retailers both in- and out-of-state.
“We can attract more people from out of state by allowing beer from New Jersey brew pubs to be showcased across the country,” Kean said in a statement.
The bill enjoys bipartisan support but observers expect an outcry from the restaurant and beer wholesaler lobbies. In order to locate within any municipality, brewpubs must obtain an often expensive and hard-to-get consumption liquor license just like any other restaurant that serves alcohol. But in an effort to stimulate the state’s commercial corridors, sponsors seek to eliminate the population restrictions that determine how many liquor licenses each municipality can allocate to its businesses (currently one license per 3,000 residents). This bill would allow for unlimited brewpubs and bars in downtown business zones.
Once lawmakers return to close out the session, this discussion will surely cause controversy in the bar and restaurant community, whose members cry they need to “protect their investment” in their existing liquor licenses, which can cost hundreds of thousands of dollars. No Assembly committee hearings have been scheduled for the bill, which dropped at the end of June, and no one has introduced it in the Senate.
With the surge in applications for breweries and distilleries, applicants are finding themselves waiting long periods of time for state approvals. In order to streamline and condense the application process, Sen. James Beach (D-Burlington) has introduced a bill to establish a Manufacturer Licensing Board that would create a simpler process and take the burden of approvals away from the ABC director.
The board would consist of the ABC director or designee as chair, the ABC’s licensing board bureau chief and three retired state troopers appointed by the governor and approved by the Senate. The bill hasn’t been referred to committee yet, though Beach says once it does, he’ll introduce amendments to certify additional retired troopers to do pre-approval inspections on behalf of the state for a fee to be paid by the applicant.
Finally, lawmakers are considering four bills to directly promote the state’s craft beer industry. The first, which passed the Assembly nearly unanimously and waits for a Senate committee vote, designates the third weekend in October of each year as the “Shuck, Sip, and Slurp Weekend” to celebrate oysters, beer and wine. The second two -- complementary but competing – bills seek to create "New Jersey Beer, Wine and Spirits Week" -- but one bill calls for scheduling it for the second week of May has passed the Assembly tourism committee while one that proposes the last week in September sits idle in the same committee and will presumably die there.
The last bill, which simply “urges New Jersey residents to purchase beer, wine, and spirits made in New Jersey and support this State's beer, wine, and spirits industries,” comes with no explanation as to how it would be implemented. It also awaits action in the tourism committee.