In New Jersey, the state’s first craft brewery and coffee roastery is suing its state Alcohol Beverage Control (ABC) Board for obstacles to growing its business. Meanwhile, in California, the state’s breweries are celebrating new laws that allow breweries to expand in the state.
Death of the Fox Brewing Company in Clarksboro, N.J., sued New Jersey’s ABC division over a special ruling and license conditions on September 21, 2022, saying ABC’s new rules severely restrict limited breweries’ abilities to advertise events and grow their businesses.
“ABC’s new rules are a transparent attempt to favor one kind of business – bar and restaurants – over another – craft breweries,” said Caleb Trotter, an attorney for Pacific Legal Foundation. “What’s more, the restriction on event advertising is an unjustifiable imposition on the free speech of breweries.”
The lawsuit was filed in the Superior Court of New Jersey Appellate Division on behalf of Death of the Fox Brewing Company, represented by Pacific Legal Foundation.
In 2019, ABC issued a Special Ruling on craft brewer operations that ranged from prohibitions on food to regulating the number of televisions or TV sizes allowed in the brewery. The television rule restricts breweries to three TVs not to exceed 65 inches. The new ruling also requires guests to complete brewery tours before purchasing or consuming craft beverages on-site with brewers providing proof of customer compliance.
The conditions took effect on July 1, 2022.
New Jersey Special Conditions
According to the lawsuit, Death of the Fox, and many of the state’s 140 other limited breweries are prohibited from advertising more than 25 annual events. That limitation includes sports playoff games, trivia nights, yoga, or other activities breweries regularly host on a weekly basis.
Read more about Death of the Fox’s lawsuit here.
The New Jersey Brewers Association (NJBA) appealed to the public on its website to help change the rules over the restrictive special conditions.
“Some pretty strict laws were passed down that restrict how all craft breweries in the great state of New Jersey are able to operate,” the trade association says. “We’re working hard to change this narrative, but we need your help!”
The NJBA pre-drafted letters and a district mailing list to encourage voters to contact legislators and N.J. Governor Phil Murphy. The letter, in part, says, “New Jersey breweries are an integral part of small, independent business communities across the state and serve as destinations for entertainment and recreation. Like so many other businesses in the state, breweries are still recovering from the impact of the pandemic and are struggling to stay afloat given the mountain of economic challenges. Unfortunately, the current ABC licensing conditions will create additional barriers. Limiting the number of on-premises events and private parties, television restrictions, and limits on non-alcoholic beverage types are part of these new conditions and will hurt this industry. This is an overreach by the ABC that goes beyond alcohol regulation.”
In the NJBA position letter dated July 1, 2022, the association said the Garden State’s craft brewing industry has experienced robust growth since laws changed in 2012. Today the state’s 140 breweries contribute $1.8 billion in economic impact and employ more than 2,200 people.
Meanwhile In California
Meanwhile, in California, Gov. Gavin Newsom signed updated rules allowing independent breweries to expand in communities throughout the state.
“We just want our brewers to feel that the sky’s the limit on what they can achieve,” said Lori Ajax, executive director of the California Craft Brewers Association (CCBA), earlier this month.
AB 2307 raises the limit on brewery growth from six satellite locations to eight and lifts the cap on how many taprooms can have a kitchen from two to four.
Jim Wood, a Democrat in Santa Rosa, California, wrote original legislation in AB 2301 to allow brewers to distribute food to restaurants they own. The legislation encourages other small businesses to open in their communities.
Fieldwork Brewing Company opened its largest open-air beer garden and indoor taproom in downtown San Leandro in September 2022. It now has eight locations in Northern California.
Before opening, Fieldworks’ founder, Barry Braden, told media that the San Leandro location would be its last for a while, despite unprecedented growth, due to limitations of the AB 2307 rules.
“San Leandro was our biggest opening ever,” Braden said. “We believe in meeting customers where they’re at, bringing them a community-centered space with great beer. We’re excited to keep looking toward the future,” he said after Gov. Newsome signed the less restrictive legislation.
Before Gov. Newsome signed AB 2307, Fieldwork could have two full restaurant kitchens and the ability to serve wine and other beer brands. Now they can have four.
California’s brewing industry doubled in the last eight years, according to the CCBA. The new legislation will allow breweries to continue selling beer and offer a family-friendly gathering space.
growing Businesses
Before the passage of the legislation, brewery owners could sell beer to neighboring food establishments. Still, they would have to ship their beer from the brewery back to the taprooms they owned because they owned the space, not the licensing under the previous law. Some brewers said the old regulation was onerous, forcing many to ship their craft beer hundreds of miles instead of from their locations.
In 2021, California had more than 1,100 craft breweries across the state, according to CCBA, the non-profit trade association representing California craft and specialty brewers. California’s craft breweries employ almost 67,000 people. Entrepreneurs and legislators hope that number will continue to grow with the help of this new legislation.
Senator Mike McGuire pushed for changes to California’s legislation earlier this year when he crafted legislation known as SB 1198. “This bill closes a legislative loophole to protect California’s craft brewers’ ability to ship customers their favorite beer.
Like SB 1198, AB 2307 allows breweries to have eight taproom locations and lifts the cap on breweries with full kitchens, while AB 2301 will enable breweries to distribute to restaurants within a five-mile radius.
Braden said under the new regulations: “This way, we make the beer our customers want and not the beer a distributor wants to sell. It allows us to be more creative and respond to on-site customer demand.”
Fieldwork said brewers who haven’t even started thinking and planning about their future now have a way to make a living in their communities while serving customer desires.
The legalities of operating breweries in New Jersey are different. State laws and the rapid rise of craft brewing establishments in the last decade show there is more work to be done to protect previously established businesses while letting breweries cater to craft beer lovers and their families.
What’s happening in your state with the craft brewery industry? Which states are most receptive or restrictive? Let us know how we can help to share your message and grow your business.