Special Ruling Issued on Microbrewery Regulations

By J.D. WATSON | Jun 05, 2019
File Photo by: Ryan Morrill

Long Beach Island — On May 28, the New Jersey State Division of Alcoholic Beverage Control issued a new special ruling clarifying the privileges of limited or “craft” brewery licenses in the state. The new ruling came six months after a previous ruling had been suspended due to industry and public outcry.

The division drafted the new ruling after an extensive outreach effort to meet with industry leaders, individual craft brewery owners, members of the state Legislature, and others whose objections led the division to suspend the previous special ruling last fall.

Under the new special ruling, craft breweries are still subject to a 25-per-year limit on “special events” that can be held on their premises, which was originally proposed in the previous ruling; however, new language in the revised ruling defines “special events” as only those that are promoted through the media or that provide entertainment in the form of live championship sporting event broadcasts, live amplified music or DJ performances.

Many activities that were subject to the 25-per-year “special event” limit under the previous ruling – such as trivia contests, craft making, animal adoption events, or yoga or other similar types of classes – will not be counted as “special events” unless they are advertised or promoted in the media.

The initial ruling was adopted last September only to be rescinded less than two weeks later, leading many to feel the ruling had not been properly investigated or planned.

“The special ruling issued today includes important changes that address key issues raised in recent discussions. The changes made are intended to help craft breweries promote their products and build their business while continuing to balance the concerns of other licensees and ensuring compliance with state law,” said James B. Graziano, acting director of the Division of Alcoholic Beverage Control.

Not all of the changes covered by the new ruling are designed to inhibit craft brewers. It eliminates a ban on food deliveries to limited breweries and allows owners to provide patrons with menus from local restaurants.

Limited breweries are required under state law to give patrons tours of their facilities before serving them. However, under new language contained in the revised ruling, a tour will be required only once a year for repeat customers as long as the brewery creates and maintains a record of customers’ previous participation in a tour. The definition of “tour” is redefined from the previous special ruling to make interaction between Limited Brewery licensees and their patrons more substantive and meaningful.

Currently, there are five limited breweries in Southern Ocean County that will be affected by the new ruling: Pinelands Brewing Co., Little Egg Harbor; Oyster Creek Brewing Co., Waretown; ManaFirkin Brewing Co., Manahawkin; Ship Bottom Brewery in Beach Haven; and Bent Elbow Brewery, coming soon to West Creek.

“It’s going to affect us and how we do our business,” said Rob Zarko, owner of Ship Bottom Brewery. “It’s going to limit the amount of live music we can have. It’s really going to hurt the local commerce – the yoga studio, the musician.”

Todd Hunt of ManaFirkin Brewing Co. agreed. “We don’t make anything off of food or the musician. It’s really going to hurt the local musicians.”

Mike Broderson, a partner at Pinelands Brewing, felt slightly differently. “It’s not going to really hurt our business,” he said. “It will cut down on the number of events we do, but it’s not going to change the way we conduct business.”

Zarko also explained their recently renovated Volkswagen bus – designed for special events – may see more time in Pennsylvania, where regulations are more relaxed.

A common refrain among the craft brewers was the confusion caused by the unclear timeline described in the new ruling.

Hunt explained he was in a meeting to discuss when the new regulations would go into effect when asked for comment.

Lisa Coryell, a spokewoman for the state Office of the Attorney General, clarified that the statutory requirements of New Jersey liquor laws limiting sales of any product for on-premises consumption to only those individuals who have toured the brewery and prohibiting the limited brewery from operating a restaurant and selling food will be enforced immediately by the ABC. However, the remaining provisions set out in the new ruling should be considered guidelines and will not be strictly enforced by the division at this time, barring flagrant or repeated violations.

Until the regulatory process is completed and regulations are adopted, the division intends to treat the guidelines contained in the special ruling as special conditions on each Limited Brewery licensee, beginning with the 2020-21 license term. Once the regulatory review period is complete, the director has the authority to impose special conditions on all licensees.

In 2012, the Legislature amended state liquor laws to promote the craft beer industry. The amendments created limited brewery licenses designed to help the growing industry, but they also restricted when and how breweries can serve alcohol on site. The Legislature never intended the limited licenses to give craft breweries the same privileges as a consumption venue, such as a sports bar or restaurant. In recent years, however, a growing number of craft breweries began serving alcohol well beyond what the limited licenses allowed or ever envisioned. This resulted in complaints of unfair competition from bars and restaurant owners who hold licenses allowing full retail privileges, according to the attorney general’s office.

Violations by the limited brewers would be subject to the same penalties as any other ABC licensee, ranging from fines to eventual loss of the license.

“We believe the activities permitted under this special ruling strike a fair and appropriate balance between the interests of full retail license holders, such as restaurants and bars, and the craft brewing industry,” said Director Graziano.

Zarko said he plans to continue much in the same way as he has. “I don’t see any real changes for us,” he said. “We plan to abide by the rules and see what happens.”

Broderson agreed. “The ABC wants to make for an even playing field,” he said. “I’m not sure they’re accomplishing that, but we’ll see. My only wish is that I owned a pizza shop next door.”

Comments (0)
If you wish to comment, please login.