Chuck Aaron, owner of Jersey Girl Brewing in Mt. Olive, doesn’t understand what’s going on.
He doesn’t know why the state appears to be backtracking in the wake of the landmark legislation which was aimed at permanently restoring the various rights and privileges of New Jersey’s breweries while stabilizing the state regulatory environment in which they operate.
Aaron feels two recent rule proposals by the New Jersey Division of Alcoholic Beverage Control (issued on Aug. 18 and Sept. 2) would negatively impact how breweries operate —and the overall brewery experience of their customers.
To Aaron, it appears all the effort to make the rules and regulations around the industry workable, are being taken away.
“After 18 months of hard work in Trenton on legislation which clearly outlined our privileges, which gained unanimous support from legislators in a bi-partisan fashion, regulators are now seeking a new path to implement elements of their policies which have been rejected,” he said. “These regulations are a workaround of the law which will lead to the restricting of brewery growth in state, while increasing and creating new costs.
“How are breweries expected to grow and be successful in a world of over-bearing regulation?”
Here’s the background.
In January of 2024, Gov. Phil Murphy signed legislation (S-4265/A-5912) that was intended to substantially boost the number of available liquor licenses statewide while easing a wide range of restrictions that have stifled breweries and distilleries.
The day was rightly hailed as the first substantive overhaul of New Jersey’s antiquated liquor license laws since the aftermath of Prohibition.
The Brewers Guild of New Jersey feels, when combined, the proposed regulations issued in the Aug. 18 and Sept. 2 editions of the New Jersey Register reinstitute economic and bureaucratic barriers which breweries across the state tirelessly fought to end over the course of almost two years, culminating in the unanimous passage and signing of the bill Murphy signed.
Eric Orlando, the government affairs counsel for the Guild and an EVP at the Zita Group, said the proposals would increase permit fees as much as 50%, add various reporting requirements, and create stifling regulatory ambiguities to be navigated by the industries small businesses.
Orlando and the Guild describe the proposals this way:
Limited Brewery Regulation, 57 N.J.R. 1927(a): The proposed regulation implements various provisions related to the governor’s alcohol reform law signed in January 2024, which in part ended various restrictions on New Jersey breweries first implemented in July 2022 by the NJ Division of Alcohol Beverage Control. The proposed regulations also impose various new rules around the brewery licensure process, the everyday operation of a brewery, and creates a new permit for “contract brewing,” a type of brewing where a brewery is paid by an entity to brew beer on their behalf which has become fixture in the nation’s craft beer industry.
Fee Regulation, 57 N.J.R. 1793(a): The proposed regulation raises fees on several permits used by all facets of the alcohol industry in the state, including manufacturers, retailers, and wholesalers. The proposal which would increase the price of more than two dozen state-issued permits by between 30%-50%, and codify other commonly-issued permits into agency regulation for the first time, impacting various normal business activities within the state’s alcohol industry including the donation of beer to nonprofits and charities, the promotion and marketing of products towards retailers and consumers, and the attendance at various events where beer is marketed and sold like trades shows and farmers markets.
The proposals are set to have their periods of public comment close in a matter of weeks, before the Legislature returns to Trenton for their upcoming lame duck legislative session.
Orlando said the Brewers Guild of New Jersey has severe concerns about these rules as they will detract from much of the legislative intent of the new law and create large amounts of red tape and expense to operating a brewery in New Jersey.
And despite securing descriptive language in the statute which clearly affords breweries many of the rights previously restricted by NJ ABC special rulings issued at various occasions in previous years, Orlando said the proposals mimic now invalidated policies that previously raised the ayre of the industry.
“After celebrating the accomplishment of ending brewery restrictions with Gov. Murphy and his administration as part of his alcohol reform efforts last year, it is incomprehensible to the industry that it has to relitigate these issue again in the regulatory process,” Orlando said.
“These issues were put to bed, we thought, once and for all, but here we are. Hopefully ABC and front office take the industry’s concerns to heart in our outreach to them in the coming weeks and doesn’t make the same mistakes twice.”
Orlando said the proposals would increase fees, paperwork and administrative oversight when a brewery wishes to use many of their revised license privileges.
But the economic impact goes much further, he said.
Orlando said the new proposed regulations will hinder efforts to coordinate between breweries and food providers, a cornerstone of the new legislation. It also will hurt the several small businesses they support, including non-profit and charitable organizations which may want to utilize New Jersey craft breweries as a venue to host fundraisers and community events.
Orlando and the Brewers Guild plan to meet with members of the Murphy administration to discuss the issue.
In the meantime, its members are trying to understand what’s going on — how issues it thought were settled are coming back.
Scott Wells, co-owner of Bolero Snort Brewery in Carlstadt, is perplexed.
He feels the new regulations will attack contract brewing and alcohol license partnerships in New Jersey, forcing the breweries’ own manufacturers to pay excessive permit fees and submit to an unparalleled level of administrative oversight in the region. In addition, these proposed regulations restrict these small businesses from participating in licensing agreements that their out-of-state competitors have been able to use to grow their own brands here.
“Why would we bar our own manufacturers from competing against companies who ship their products into the state on a level playing field,” Wells said. “This hurts the breweries and the consumers statewide leaving me to question — who does this benefit?”
