NJ Continues to Restrict Craft Breweries – Limits on Special Events, Food, & More

On May 28, 2019, the Division of Alcoholic Beverage Control (“ABC”) issued a new Special Ruling for New Jersey craft brewery licenses with changes that address concerns raised by the industry. The previous Special Ruling, which was quickly suspended six months ago after strong criticism, is now officially rescinded.

The ABC drafted the new Special Ruling after consulting with some industry leaders and other interested parties. Like the previous ruling, it aims to restrict NJ limited breweries from competing with bars and restaurants who hold licenses allowing full retail privileges. The changes in the new ruling, however, reflect key issues raised by breweries about their ability to promote and build their businesses.

Some notable changes in the new Special Ruling include:

• Limited breweries can once again provide patrons with menus to local restaurants and have food delivered, which was banned under the previous special ruling. Providing food or collaborating with vendors, including food trucks, continues to be prohibited.
• Breweries are still capped at hosting no more than 25 “special events” per year, however, the changes now define “special events” as only those promoted through the media or which provide entertainment with live music performances or broadcasts of live championship sporting events. With this change, trivia nights, paint-and-sips, and other activities that previously were categorized as “special events,” are no longer limited.
• Private parties remain limited to 52 events per year, but party hosts are now permitted to bring their own wine and beer to their events, allowing breweries to better market themselves as venues.
• The requirement for breweries to give a tour of their facilities to each customer is now more lenient. Tours were previously required for each visit, but repeat customers now only have to tour once a year as long as the brewery keeps a log of tour participation.
• Limited breweries can now obtain permits to participate in 12 off-premises events each year. This will allow them to sell beer at community events and other venues that were previously restricted.

The New Jersey ABC intends to convert the special ruling into regulations that will be adopted in accordance with the formal notice and comment process. In the meantime, the special ruling will be imposed as special conditions on all licensees during the 2020-2021 term.

New Jersey notably continues its efforts to restrict craft breweries, especially compared to neighboring states. Pennsylvania is helping expand its craft beer industry, and now permits craft breweries to sell Pennsylvania-made liquor and wine. The creation of a Pennsylvania Malt and Brewed Beverages Industry Promotion Board recently authorized the approval of up to $1 million annually in grants for the development and marketing of the PA beer industry.

Stark & Stark’s Beer & Spirits lawyers are experienced in advocating for breweries in New Jersey before the ABC and other regulatory bodies. If you are an interested party that would like to provide comments during the formal rule adoption process and would like assistance from our Beer & Spirits lawyers, please reach out to Marshall Kizner or Dolores Kelley.

from New Jersey Law Blog http://bit.ly/2HKfGo8
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