A hundred years ago, New Jersey had its share of the largest and most respected breweries in the country. With Pabst, Rheingold, Krueger and Ballantine, New Jersey brewing was the seventh-largest industry in the state, generating $20 million a year by 1910. Ballantine was the No. 1 ale in the country. The beer story in New Jersey today is craft-brewing, but there is a clear bias against our State’s microbreweries. New Jersey’s laws place our five breweries at financial and marketing disadvantages as compared to our wineries. There is no legitimate basis for this bias, and the laws should be changed to even the playing field or perhaps even assist our local breweries. Jersey brewers went through a dark period that began with Prohibition in 1920. Almost all of New Jersey’s legitimate brew masters left the business. Breweries that survived at the end of Prohibition could not compete with large national breweries like Anheuser-Busch, Coors, and Miller, which were able to efficiently distribute their beers throughout the country’s newly improved highways and transportation systems. Although we still offer favorable infrastructure, ports, and a beer-loving population, New Jersey has lost all of its larger breweries. Ballantine closed shop in the 1960s. The Rheingold Brewery in Orange closed its doors in 1977, followed by Pabst in Newark in 1985, leaving Anheuser-Busch as the only large brewery in the state. Local microbrewers and brew pubs produce smaller batches of distinctive artisan beers that fill a niche ignored by the mega-breweries. Breweries are defined and controlled by N.J.S.A 33:1-1 et seq. Microbreweries are generally defined as smaller, craft-brewers that produce less than 15,000 barrels per year. N.J.S.A. 33:1-10 creates three types of brewery licenses:● Section 1a Plenary License – for large breweries with unlimited production. The license fee is $10,625.● Section 1b Limited License – for smaller breweries. The license fee ranges from $1,250 to $7,500 based on the number of barrels produced;● Section 1c Restricted License – for brew pubs affiliated with a restaurant. Production is limited to 3,000 barrels, and brew pubs are limited to selling their beer on site to the restaurant’s customers. They cannot distribute their beer through a wholesaler or stores. The license fee ranges from $1,250 to $2,500.Legislators Prefer Wine. Wineries are regulated under the same group of statutes, yet wine is treated more favorably. The simplest example of this disparity is the fees charged for licensing. As listed above, the licensing fee for an unlimited plenary brewer’s license is $10,625. A plenary license to produce unlimited wine under N.J.S.A. 33:1-10(2) (a) costs just $938. The license fee for even a restricted brew pub is more than that ($1,250 to $2,500). Another, more significant example of the bias against beer is the limitation on over-the-counter sales. Wineries are granted unlimited direct sales while breweries are limited by permit to just two-six packs per customer per day. This is a harmful limitation because wineries and microbreweries both offer tours as a marketing strategy. Wineries can generate significant revenue by selling cases of wine at the conclusion of its tours, while New Jersey’s craft brewers cannot. Why was this distinction created? Perhaps the most harmful difference in treatment is the ban on free samples. New Jersey residents have been inundated with commercials for the mega-breweries like Bud, Coors and Heineken, so most people buy beer without considering smaller brands. The challenge for microbreweries is simply to get the public to try their beers. People who try the local beer generally will buy it again. An effective marketing technique would be to offer small samples in liquor stores, the way wine-makers often do. For reasons unknown, however, New Jersey law prohibits breweries from offering free beer samples in liquor stores. N.J.S.A. 33:1-12 was amended in 2003 to specifically allow free consumer wine samplings in stores – but not beer. The current trend for “green” products favors the microbreweries in that they typically buy, produce and sell locally. They even recycle their used malted grain by selling or donating it to local farmers to feed livestock. Other than Budweiser, produced in Newark, beer from the large national brands is made thousands of miles away, and then shipped in trucks, trains and ships. This shipping not only affects the beer, but it creates a large environmental footprint. Beer and wine are similar products. Wine has slightly higher alcohol content. Why have our local craft brewers been placed at a disadvantage? Legislative history indicates an effort to protect and promote New Jersey’s farming industry, which is tied to our wineries. This seems to be a commendable purpose, but the same benefits should extend to our breweries. Perhaps this disparity is the result of lobbying by the national breweries seeking to prevent local breweries from taking advantage of being local. In any event, it is time for the laws to be amended to eliminate these disparities and assist our local breweries to prosper.
