Independent Brewers protest decision by ABC to limit microbrewery activities

By Meg Fry
New Jersey | Sep 26, 2018 at 12:09 pm

The Independent Brewers of New Jersey, a grassroots organization comprised of nearly 67 breweries across New Jersey, has created an online petition in protest of a special ruling prohibiting certain activities by holders of limited brewery licenses, put into effect Monday by David Rible, director of the New Jersey Division of Alcoholic Beverage Control.

“This special ruling will set New Jersey back in terms of beer culture, tourism, industry competition, and disproportionately harms specific segments of the industry, including small producers, nanobreweries and new brewery ventures,” the petition, which already has more than 16,000 signatures, states.

In his ruling, Rible deemed it “necessary for the proper regulation and control” of the industry, which he said has faced “significant confusion” regarding “what constitutes an appropriate tour and what constitutes permissible activities that may take place on a licensed premise.”

The ruling effectively limits the number of on-premise events at tasting rooms for 88 breweries currently in operation and 23 with pending applications, including weekly trivia nights, live music performances, televised sporting events and more, while also allowing additional off-premise events, including festivals and athletic events, with the obtainment of special permits.

The special ruling most notably prohibits limited brewery license holders from hosting more than 25 on-site activities, including open mics, charitable fundraisers, and job and community networking events, and more than 52 private parties, such as birthdays and weddings, annually.

“The hardest part of the ruling is knowing that this ultimately hurts our community, the local businesses and family-owned restaurants, the musicians and artists, the charity and civic organizations we do our best to support, and the customers who we have come to know and become close to,” the Independent Brewers of New Jersey’s online petition states. “Today was a resounding victory for wealthy lobbies and special interests.

“It was a sad defeat for small businesses and revitalizing communities across our state.”

The organization also pointed out that this ruling does not affect other alcohol producers such as wineries and distilleries in the state.

The NJABC said it worked in conjunction with the brewers before ruling — and that the decision was made to clarify the ruling in 2012, when lawmakers loosened regulations.

“The special ruling was created with significant input from the New Jersey Brewers Association and the Brewers Guild of New Jersey and is the product of collaboration and compromise among stakeholders in the craft brewery industry,” a spokesperson for the NJABC said. “The division is implementing the special ruling on a temporary pilot basis and will monitor the activities being conducted on and off licensed premises of limited breweries.

“The information and data collected by the division through its implementation of this special ruling will eventually form the basis for the development of regulations governing the burgeoning craft brewery industry. The special ruling will be in effect for at least six months before a formal rulemaking process gets underway.”

Rible states in the ruling that, when lawmakers loosened regulations in 2012 to make it easier for license holders to market and sell more beer for consumption on-premises in conjunction with tours, it simply was intended to sustain the demand for craft beers 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,” Rible said in the ruling. “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.

“I cannot overlook the fact that the primary purpose of a limited brewery license is the manufacture of malt alcoholic beverages and the distribution of these products through the three-tier system, not the operation of a retail outlet for its products.”

Some limited brewery license holders, which typically pay a few thousand dollars for their license, have since operated like bars and restaurants who often have paid up to $1 million for their licenses and the right to host weekly events.

Eric Orlando, executive director of the Brewers Guild of New Jersey, said the most contentious issue in the 10 months of negotiations between his association, the New Jersey Brewers Association, the New Jersey Licensed Beverage Association and the New Jersey Restaurant & Hospitality Association, has been the value of a liquor license.

“It essentially comes down to, ‘What gives the right of a brewery to be able to do this when I have paid for the right to do so?’” he said.

While the special ruling prohibits limited brewery license holders from hosting more than 25 on-site activities and more than 52 private parties, it does grant limited brewery license holders the ability to host up to 12 off-premise events annually, giving breweries the right to organize and host events, as opposed to paying for tents at third-party events and festivals.

“New Jersey has never allowed something like this,” Orlando said. “And the NJABC has an openness moving forward to potentially expand the rights and privileges that extend to these off-site events.”

Still, while customers can still bring in their own food, breweries can no longer coordinate with other vendors in the community, such as food trucks and small restaurants, to provide menus.

Orlando said there certainly is room for improvements moving forward.

“Based on feedback from the field and how these standards are applied, the director can make adjustments to what was issued on Monday,” he said. “It is not written in pen; it’s written in pencil.

“This gives us a chance to work on outstanding issues based on real-world reactions.”

However, not every limited brewery license holder is upset about the Special Ruling.

Gretchen Schmidhausler, owner and brew master of Little Dog Brewing Co., a four-barrel craft brewery in Neptune City, said it will not affect how she runs her business.

“It clarifies what limited brewers can do and cannot do, thus leveling the playing field,” she said. “I’ve been involved in the brewing industry since 1996. The ability to have a tasting room, enacted in 2012, was a giant step forward for the industry.

“When I opened Little Dog in November 2014, I was told, ‘No special events permitted.’”

She did, however, say the addition of off-premise events are certainly a plus.

“The temporary special ruling conveys a lot more privileges — at least that’s how I see it,” Schmidhausler said.

Meg Fry | mfry@roi-nj.com | megfry3