New Jersey is not known for their alcohol, at least not in any popular sense of the word. Our local scene is overshadowed by NY’s Finger Lakes in the winery department. Our local breweries are outshined by the faceless giant known as Anheuser-Busch in Newark (it displaced regional legends Ballantine and PBR during the great brewery consolidation 50 years ago), and the favorable brewing environment in PA (even if their retail policy is asinine). Combined with a liquor licensing scheme that makes opening a retail establishment next to impossible, NJ is largely missing out on the craft brew explosion.
All this may have changed late in June, when the Legislature passed Assembly Bill 3831, changing the definitions of winery licenses; and the introduction of Assembly Bill 3969, changing the definition and production limitations on small breweries.
Beer Before Wine
New Jersey has treated wine and beer like a favorite son and his black sheep younger brother. While PA has at least kept a favorable environment for breweries in allowing them to offer direct-to-consumer sampling and purchases, NJ keeps the mentality that wine is classy and beer is for slobs. Visiting any NJ brewery ultimately feels like a sterile experience.
NJ has 4 main craft houses: Flying Fish in Cherry Hill, River Horse in Lambertville, Cricket Hill in Fairfield, and High Point/Ramstein in Butler (they focus more on niched brewing styles than the others). Compared to other breweries just across state lines in PA and DE (e.g. Dogfishhead, Troegs, Victory, Yards, Defiant, Weyerbacher, and Sly Fox), there is the distinct feeling that the NJ brands simply can’t compete, regardless of quality of their beers. A trip to any of the PA breweries offers unique experiences of either unlimited free samples or a quality brewpub with a menu based around beer. In NJ, we have to go through a meaningless song-and-dance involving nominal fees just to “taste” the beer and limited quantities of the “samples”. The brewhouses aren’t profitable enough to afford the liquor licenses that are artificially expensive thanks to an overly restricted market. The few actual brewpubs that do exist cannot easily distribute, creating a sort of walled-off environment.
Wine Before Beer
Under the current statutory framework, wineries can offer free samples as often as they want. They pay considerably less for their license, which allows for a considerably greater volume of production. Part of this preference underscores the difference between NJ and PA, which is agriculture.
Both states have strong agricultural bases. Both are uniquely situated in a climate favorable to alcohol ingredients. Pennsylvania specifically has been a beer haven since the Hessians settled there, bringing with them the barley and hops necessary for brewing. Hops can only be grown in certain areas of the country with the right amount of temperature fluctuations, soil, and moisture (namely Oregon, northern California, Colorado, Pennsylvania, New York, and New Jersey). However, for some reason NJ has only recognized the agricultural importance of grapes, and ties the winery license to a land-use requirement of at least 3 acres of cultivation.
The bill that just passed (3831) arguably favors big wine by changing the licensing scheme. It is less-protectionist by allowing out of state wineries apply for a small winery license, and (if I’m reading it right) giving them an allowance of one extra sampling/retail location over local wineries. It eliminates the farm winery classification, creating instead a scheme that allows small wineries and wine manufacturers. An argument can be made on both sides; on one hand it eliminates a protected class of business and encourages foreign wine, on the other, it also allows more competition and lowers the licensing fees slightly. A farm winery used to have to pay $375 for a 50,000 gallon license, which is now $250 under a small winery license, but adds $250 for a limited wholesale license.
The real harm is that it makes wine play by the same rules as beer by eliminating the ability for wineries to sell directly to retail and instead go through the notoriously corrupt distributor networks (usually these are dominated by the biggest producers and restrict smaller businesses’ ability to get their products to consumers).
Even though the licensing fees are lower for small wineries, it is an added fee and longer trip to consumers. While I do not see enjoy the suffering of wineries, it is nice to see the state stop playing favorites. I do propose that aside from the wholesaler requirement, the amendments to the winery licenses aren’t as fatal as the industry makes them out to be. In fact, if we are to get more “craft wineries” in NJ, to be constitutionally sound it is necessary that they be distributed in a non-discriminatory means. I would hope that NJ wineries don’t tuck tail and run simply because consumers ultimately will have more access to local wine from all over the region at the retail level.
It is strange in that it seems to unduly punish the favored son of alcohol regulation, even if it simplifies the regulatory framework.
Beer Gets Some Respect
The weirdness gets weirder reading a. 3969, where bizarro NJ finally catches up with the brewing explosion as it cracks down on wineries. Under 3969′s proposed changes, it nearly doubles the brewing limit for limited brewery licenses from 300,000 to 500,000; and, like the changes in 3831, allows out-of-state brewers to apply for the same license. More importantly, it expressly adds the same language as found under the winery licensing schemes permitting on-site sampling and retail operations. Consumers can now go to the brewery and not only sample the products with greater ease, they will also face less obstacles in purchasing beer from the source.
Finally, it eases the limitations of brewpubs to not require the brewing to occur at the same facility as the restaurant. Bigger breweries in other states, such as Victory in Downington, PA recently ended tours of their brewpub brewing facilities as they expand production. NJ needs a brewery as good as Victory, as its brewpub is famous for great food, atmosphere, and beer. The proposed bill makes that possible. Another example is found across the Delaware, in the state of Delaware. Dogfish Head in Reboboth Beach, DE had to move their brewery miles away to Milton, DE to allow for expanded capacity. Now, there is a limited brew operation at their brewpub, and they are not limited in their capacity as one of the leading craft breweries.
As the craft industry grows, the Assembly Bill as it stands right now allows for the future growth of NJ’s beer industry. Should a small brewpub such as Port 44 in downtown Newark require expanded capacity, they would be able to go off-premises without having to apply or re-apply for numerous and redundant licenses for each facility. It also allows for breweries to conduct the same sort of sampling events that have been commonplace for wine connoisseurs with less regulatory interference. Most importantly, it allows the brewery experience to become more interactive. As people can go to a brewery and learn what makes beer so good, the interest in local breweries will soar. This will hopefully lead to an interest in locally-grown beers, and since NJ has the climate for all of beer’s key ingredients, it could provide a boon to NJ agriculture and open space preservation.
Now, the only thing standing between New Jersey and a vibrant bar scene is the restrictive liquor licensing scheme, limiting the amount of retail establishments in municipalities. That, however, is another rant for another day.
