Op-Ed: Applauding NJ Lawmakers for Reviewing Outdated Liquor Laws

A.J. Sabath | March 6, 2019 | Opinion
The Legislature is taking the first substantial step in recent memory toward modernizing the state’s liquor laws

A.J. Sabath
On Thursday, an Assembly committee will be meeting in Trenton to hold hearings on the economic and legal impact of the state’s antiquated liquor licensing laws.

On the surface, this would appear to be just another rote function of the Assembly Oversight, Reform and Federal Relations Committee. But, for those within the liquor industry, this is the first substantial step of our state Legislature in recent memory to modernize the state’s liquor laws.

A key discussion point of this committee must be the “two-license limit” that has prohibited certain businesses, including many supermarkets, from owning more than two liquor licenses in New Jersey. While these businesses have been unable to expand operations in New Jersey over the past 50 years, other groups have used a legal workaround to create large liquor store chains in the state.

Because many supermarkets have a single corporate owner, these entities are limited in the number of liquor licenses they can own. Most liquor store chains, however, are made up of individual companies with each separate company owning two licenses but all doing business under the same name. This is why there can be almost 50 Buy-Rite Liquors in New Jersey, yet most supermarkets can’t sell beer, wine and spirits.

‘…massively unfair’

This has created the haves and have-nots. Liquor store chains, which have seemed to grow and thrive, are only limited by the amount of companies that become a part of the empire. Meanwhile, supermarkets are limited to two liquor licenses, no matter how many stores or employees they have in New Jersey.

This is massively unfair, of course, and there is a bill in the state Legislature that would finally allow other entities, besides liquor store chains, to expand operations in New Jersey. Such a bill would mean that supermarket customers could purchase beer or wine during their grocery shopping, rather than deal with the senseless inconvenience of going elsewhere.

The Assembly committee will likely hear on Thursday about the many other liquor reforms taking place across the country, many of which are being ordered through government action or the courts.

In Massachusetts, the state is allowing up to nine liquor licenses per entity, a steady increase from just the two permitted in 2011. A state-conducted study on the impacts of the Massachusetts law showed that the law protected small retailers and promoted economic growth.

Meanwhile, the state saw $16.9 million in increased economic activity and 150 new jobs attributed to the increase from just two to five licenses. Plus, alcohol excise-tax revenues increased from $76.3 million to $84.4 million over just four fiscal years.

Other states have eased regulations

There’s also been substantial movement in South Carolina, where the state Supreme Court struck down a law that limited any “liquor-selling entity” to only three liquor licenses. It was an obvious move to protect businesses in that state from the burdensome regulation we see in New Jersey.

In addition, the U.S. Supreme Court recently heard arguments as to whether a Tennessee law that limits liquor licenses to residents who have lived in the state for at least two years is constitutional. And in Colorado, beginning January 1 this year, residents can buy full-strength beer at grocery and convenience stores for the first time.

All this progress should not be a surprise, as the trend has been to ease regulation and open markets. At least 45 states now permit beer to be sold in supermarkets. Meanwhile, 33 states allow both wine and beer to be sold. Other states have open markets on beer, wine or spirits.

I salute the Assembly for shining a light on the glaring disparities in the liquor retail industry and hope our lawmakers will come to the same conclusion as elected leaders nationally: New Jersey’s liquor licensing must be unequivocal and universal.