Gopal, Singleton, Sarlo, Greenstein Bill to Revise Laws Pertaining to Alcoholic Beverage Industry Advances

“The New Jersey craft brewing and distilling industry is growing rapidly across New Jersey, becoming a mainstay for tourists and locals alike,” said Senator Gopal (D-Monmouth). “It only makes sense to give this industry room to grow and prosper. Under this bill, craft alcohol manufacturers will flourish and revitalize Main Street business districts across the state.”

Specifically, the bill, S-4265, would:

1) allow breweries to hold certain events and coordinate with food vendors, and clarify several privileges the breweries received from recent executive orders, regulations and special rulings;

2) establish a farm brewery license that would permit a brewery engaged in farming to produce a limited quantity of alcoholic beverages for sale;

3) establish procedures for transferring inactive licenses to avoid expiration; and

4) authorize the issuance of special licenses from eligible municipalities for food and beverage establishments located within existing shopping malls.

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1) Craft Alcoholic Beverage Manufacturers

Under the legislation, as it relates to the craft brewery industry, the manufacturer would be allowed to offer certain types of food and coordinate with food vendors; the bill would maintain the current prohibition on operating a restaurant on the licensed premises.

The bill would also allow manufacturers to hold an unlimited number of on-premises special events and private parties, and to hold not more than 25 off-premises special events, as well as 25 social affair events.

“Small businesses remain one of the backbones of our economy, and are a boon to downtowns across the state,” said Senator Greenstein (D-Middlesex/Mercer). “Removal of these unneeded restrictions for our craft brewery owners will allow them to think more creatively, find new opportunities to expand their operations, and serve their communities.”

The intent of the bill is to resolve the controversy regarding ABC’s special ruling by updating certain laws and regulations governing craft breweries, and to help them grow their businesses.

2) Farm Brewery License

The bill establishes a farm brewery license, whose holder – if actively engaged in farming -- would be entitled to brew any malt alcoholic beverages in a quantity not in excess of 2,500 barrels of 31 fluid gallons per year, and to sell products to consumers for consumption off the licensed premises and to offer samples for sampling purposes only.

Currently, a manufacturer could obtain a farm winery license for $375 to produce up to 50,000 gallons of wine per year, provided that the licensee is using locally grown products to produce the wine.

Under the bill, a farm brewery license would operate in much the same manner as a farm winery license, using locally grown farm products in brewing malt beverages which would be sold at the farm.

3) Transfer of Inactive Plenary Retail Consumption Licenses

This provision would establish procedures for transferring inactive Class C licenses, which allow for the retail sales of alcoholic beverages. Under current law, an inactive license is a license that is not being used at an open and operating licensed premises.

Under the bill, all inactive licenses must be actively used, or transferred to another person or receiving municipality. Otherwise, the licenses would expire at the end of their terms, or under a schedule developed by ABC, unless certain conditions are met.

“For nearly a year, I pushed for liquor license reforms that focused on the transfer of inactive licenses, rather than the creation of new, additional licenses,” said Senator Singleton (D-Burlington). “This new law modernizes the process and provides a fair, efficient way to streamline the transfer of inactive licenses. And, most importantly, it moves our state one step closer to modernizing our archaic liquor license laws, without devaluing existing owners’ investments.”

4) Issuance of Special Licenses in Municipalities with Shopping Malls

This provision would authorize the limited issuance of special licenses from an eligible municipality to a person or other legal entity for use in connection with a food and beverage establishment located within a shopping mall that: (a) connects or provides access to a restaurant or establishment that serves alcoholic beverages; and (b) existed prior to the enactment of the bill. In addition, the fees for the licenses would be based on the average sale price of recent license sales in the eligible municipality or an appraisal, whichever is greater. The bill would not apply to strip malls.

The special license issued would authorize the sale of alcoholic beverages for immediate consumption on the operator’s premises that is operated as a food and beverage establishment located within a shopping mall; this would not change even if the license is sold.

An “eligible municipality” would mean a municipality in which at least one shopping mall is located and the number of plenary retail consumption licenses has reached the population limitation established in current law.

“Granting these special beverage licenses for shopping mall establishments is one more way to help us reform current law and help meet demand in municipalities that have already reached their population quota for licenses, without causing major upheaval in the existing licensing structure,” said Senator Sarlo (D-Bergen/Passaic). “It will also provide a much needed boost for shopping malls who may be continuing to struggle post-pandemic.”

The bill was released from committee by a vote of 11-0.