New Jersey’s Governor Is Screwing Its Breweries

Having grown up in New Jersey, there are plenty of things about the state that I’m not particularly proud of. MTV’s “Jersey Shore,” for example, was not the best look, particularly not for Italian-American New Jerseyans like yours truly. And I remember feeling plenty of secondhand embarrassment watching residents turn every little statewide oddity — from full-serve-only gas, to Action Park’s dismal safety record — into points of burning pride to be loudly squawked about in mixed company.

But that embarrassment was just personal. It’s nothing like the professional mortification I’ve felt for the past year watching my home state fumble toward desperately needed, common-sense reforms to its outdated, arcane brewery laws, only to be undercut at the finish line by a one-time industry ally in the governor’s mansion. It’s a dramatic betrayal befitting “The Sopranos” — “They’re called ‘taprooms,’ T” — and while I wish it wasn’t worthy of national attention, it most certainly is. The legislative quagmire New Jersey’s brewers have struggled through for the past year is a poignant reminder that, despite the craft brewing industry’s collective arrival in the national mainstream last decade, breweries still operate under the regulatory idiosyncrasies of the states where they’re based. Some are more onerous than others.

For those readers not apprised of the sorry situation in the Garden State, a quick primer is in order. New Jersey is one of the few states in the country where liquor licensees are legally allowed to resell their licenses. That, coupled with the state’s nation-leading population density, and the fact that there are only a finite number of licenses capped by population, has made those licenses extremely lucrative for anyone who holds one. Like, “$1.15 million for a single license in 2016” lucrative. We love a secondary market that turns public permits into private assets to be bought and sold for orders of magnitude more money than intended, don’t we folks?! (We, like New York City’s cabbies, do not. But I digress.) This system has put the state’s powerful restaurant and bar owners crosswise with its craft breweries, many of which operate taprooms that do some of the same things as those businesses — namely, sell beer. Crucially, N.J.’s “limited brewery” licenses are different, and thus tend to be much cheaper to obtain. You can probably see where this is headed.

As N.J.’s craft brewery count slowly rose with the then-favorable industry tides last decade, the state’s ~6,000 liquor licensees, many of whom had paid gobs of money to third-party sellers for the privilege to sell beer, became increasingly agitated about this apparent encroachment. Brewery taprooms are not permitted to sell food, but in 2012, the state’s Division of Alcoholic Beverage Control prohibited them from hosting food trucks. In 2019, it rolled out restrictions on the number of events they could hold annually and a rule designed to make brewery tours more substantive. And so on. Taken together, the agency’s various interpretations and rulings of existing laws on the books have helped to hamstring the state’s craft brewing industry: Despite being the country’s ninth most populous state, it ranks just 44th in breweries per capita, according to the Brewers Association’s 2022 data. Are you surprised that New Jersey craft brewers and their boosters got the impression that the state was kneecapping (figuratively, not “Sopranos”-style) a growing industry at the behest of an incumbent one?

I’ve lived out of state for many years, so I wasn’t following this situation closely until last summer, when the N.J. A.B.C. announced that it planned to begin enforcing the licensing rules as written for the state’s 150-plus craft breweries. (Prior to that, enforcement was reportedly pretty loose due to a combination of fewer breweries, then the Covid-19 pandemic.) As Eric Orlando, executive director of the Brewers Guild of New Jersey, told Good Beer Hunting’s Kate Bernot in July 2022, regulators appeared to “have put themselves in the position of [picking] winners and losers” by enacting the conditions, particularly coming off the heels of the pandemic.

As someone who’s spent a dozen years and countless hundreds of dollars at New Jersey bars, restaurants, and liquor stores and come away mostly underwhelmed, I think the A.B.C. picked the losers in this case. But hey, agencies overreach and misinterpret and muck stuff up sometimes, especially when laws are vague and/or old. So while I was sympathetic to Garden State brewers’ cries of foul, I was gladdened to see them actually take action on it, bending the ears of legislators around the state to the f*ckery at hand and begging for reform.

The sum total of these efforts coalesced in an astonishing legislative triumph late last month, with lawmakers in both the State Senate and General Assembly unanimously passing a bill, S3038, designed to update and neutralize some of the more restrictive aspects of the N.J. A.B.C.’s enforcement regime and make things easier on the state’s beleaguered breweries. Unanimously! In this hyper-partisan political climate! In New Jersey, a state that can’t even agree on whether its beloved hog-based breakfast log should be called “pork roll” or “Taylor ham!” All that stands in the way of the bill becoming law is the signature of Governor Phil Murphy, who has called the state’s craft brewing industry “a source of pride” in the past, and partnered with breweries to offer free beer to drinkers in exchange for getting vaccinated during the pandemic. He was widely expected to sign the bill, and why not? Given his previous support, his John Hancock seemed a mere formality.

You probably see where this is headed.

With the duly passed legislation on his desk, and super-majorities of New Jerseyans indicating in polls that they want to bring their state’s craft brewing industry into the modern era, Murphy is now playing spoiler, refusing to codify the brewery relief bill in favor of holding out for “comprehensive, broad-based [liquor] license reform” in the state. Which, like, sure, given the undue influence the “New Jersey liquor cartel” (as New Jersey Star-Ledger columnist Paul Mulshine calls the state’s licensees) has had over this process, I can see merit in overhauling the whole damn system. But in the meantime, the state’s breweries are twisting in the wind, with only a promise on June 30 from the A.B.C. to suspend enforcement for six months standing between them and the Dark Ages. The governor’s gambit, as assessed by Mulshine and other readers of the Trenton tea leaves, is to keep breweries in limbo and leverage their plight into political might. Whether it works remains to be seen, but anyone can see right here and now that it stinks for N.J. breweries.

As someone who’s covered the beer business for over a decade, I can’t say I’m surprised. Throughout the country, statehouse battles over brewery reform have produced many bizarre outcomes, chicanerous horse trades, and strange bedfellows over the years. But as someone who hails from New Jersey, I can’t say I’m proud to see it happen there.

🤯 Hop-ocalypse Now

In the very first Hop-ocalypse Now section of this column, published on Sept. 15, 2022, I noted that Buffalo Bills fans drank more Michelob Ultra than any other draft beer at the N.F.L.’s Thursday night season opener, per data from the folks at BeerBoard. Not even a year later, and there’s more troubling news out of Western New York: The official sponsor of the Bills Mafia’s 2023 season is a raspberry-flavored malt beverage named Throwback Tea. What? The more folding tables they body-slam… the harder they’ll tea? That doesn’t even make sense!

📈 Ups…

In *breaking news* on Wednesday evening, Anchor Brewing Union advised Sapporo USA that workers want to purchase the brewery and run it as a worker co-op.… Should that not come to fruition, Anchor workers tell me the severance packages from Sapporo USA are actually decent… The Beer Institute refused to take Senator Ted Cruz’s bait regarding Bud Light’s alleged ad code violation with Dylan Mulvaney…

📉 …and downs

Just four West Coast states make up half of all hard kombucha sales, despite yearslong eastward expansion efforts… As liquor continues to steal share, the Beer Institute, Brewers Association, and National Beer Wholesalers Association are at odds over potential TTB reforms… Year-over-year inflation on both on- and off-premise beer prices in June continued to outpace the economy overall… Here’s how Sapporo USA’s PR pro spun the Anchor story to mainstream media…

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