Why won’t N.J. capitalize on craft brewery boom?


Only four states are home to fewer breweries per capita than New Jersey — Louisiana, Mississippi, Alabama and Utah.

Why?

Why would a wealthy, densely populated state in the heart of the craft-loving Northeast, one with a rich brewing tradition and fervent beer fans, fail miserably at capitalizing on the brewery boom in this part of the country?

Ask yourself that question, and then ask the political party in power about their choking brewery regulations, and what’s really behind the rules. Because everyone’s full-throated roars are needed ahead of statewide elections next year.

Just so we’re clear about where we stand today, and for anyone not aware: A long-delayed attack on New Jersey breweries is underway after an uneasy respite from the siege. It stems from a 2019 Special Ruling by the state that set strict guidelines for breweries, but was loosely enforced in the time since. That changed July 1.

As progressive as many of us may be personally, we can’t avoid the fact that the mercenaries outside our gates fly the banner of the Democratic Party, are armed with the sword of state regulation and were sent into battle on behalf of a powerful lobby.

That’s the reality in the insane mesh of arcane, head-spinning liquor laws in New Jersey. These laws are fossils of Prohibition, and they spit on the memory of New Jersey’s brewing history, when the state’s brewery and pub landscape thrived, spurred on by an influx of European immigrants. Newark alone was home to a staggering number of breweries.

I’ve stayed as removed as possible from the behind-the-scenes regulatory battles of the New Jersey craft beer industry in the three years since we first poured a wild ale at the northernmost brewery in the state. I’ve mostly sat on the sidelines while groups representing the interests of New Jersey breweries fought the good fight against the dark hole of this state’s regressive alcohol regulations, and on behalf of a vision of a vibrant, growing beer culture in New Jersey. Growth that would help the entire alcohol industry in the Garden State. Growth that certain industry groups plagued by shortsightedness fail to contextually appreciate.

So, I took a break from processing the 1,320 pounds of fresh berries that I picked up from a family farm in Hammonton to address the newly-enforced Special Ruling, parts of which, quite plainly, form an unconstitutional abridging of protected commercial speech.

Case law is clear on content-based speech restrictions, such as the one in the ruling that limits how often I can post to social media which European football matches will appear on the television at the brewery. Once I mention any specific match, the ABC treats its very airing as an event, demands notification and limits me to 25 such events each year.

This and other content-based speech restrictions clearly run afoul of U.S. Supreme Court rulings on commercial speech.

Closer to home, just in 2018, a New Jersey district court struck down another state curb on commercial speech, one that barred establishments from advertising BYOB. It based its decision on numerous Supreme Court cases regarding content-based abridging of commercial speech.

Essentially, the Supreme Court holds that governments must pass a legal test to permit the regulation of non-misleading commercial speech concerning a lawful activity. It must show a substantial interest in regulating the speech and prove that the regulation is no more extensive than necessary to serve that interest.

The rules limiting New Jersey breweries’ ability to advertise and promote lawful activities, like the fact that a food truck is legally parked in public at their curb, fail this test, and fail it miserably.

Let’s dive further down the rabbit hole.

I can legally sell you a cold pretzel, but not a hot one. I can legally mount televisions, but no more than two of them, and they had better not measure a centimeter larger than 65 inches from corner-to-corner. I cannot legally make you hot beer in the winter and add cinnamon to it — you have to add the cinnamon after I pour it. I think?

If I’m a brewery on Main Street, I can’t post which food truck is legally parked outside the brewery, even if I played no role in its presence, nor can I suggest to a food truck owner that they park on Main Street outside the brewery. Yes, let’s be clear, this Special Ruling goes so far as to restrict the content of the conversations that one small business owner can have with another small business owner, and limits the conversation that a business owner can have with the public.

Breweries like mine, sited on large swaths of private property, carry an even greater — and unequal — burden when it comes to the issue of food trucks, because there is no Main Street in our parking lot. A food truck would need permission from the owner of our property to park in the large common parking area. Again, I can’t facilitate that by suggesting it to the owner of the complex. Or let anyone know the truck is parked in the lot. That’s how restrictive this new ruling is on speech.

Oh, if someone plugs a guitar into an amplifier or sings through a microphone at my brewery, I am legally obligated to notify the ABC. I literally have to tell the state if someone is playing an electric piano in my brewery. And it counts as one of my 25 events.

Similarly, the method of serving some wild beers, served for centuries in Europe, is expressly forbidden under our state laws. Take a Berliner Weisse, a tart wild ale traditionally served in Germany with one of two syrups — red raspberry or green woodruff — added to the finished beer at serving.

This is illegal in New Jersey.

Do you like beer slushies? Well, they are illegal if any flavoring or juice is added to the beer when it goes into the slushy machine. This is a new point of emphasis by the state this license term, printed on our licenses, most likely spurred on by the powerful New Jersey Restaurant and Hospitality lobby.

I would go as far as to submit that it would be reasonable to believe that the entire Special Ruling runs contrary to state law in that it is crafted clearly in favor of one industry over another, imposing taxes by way of fees, as well as myriad restrictions, that it does not impose on similar industries.

Let’s also be clear on this: The rank-and-file public servants in the ABC are not to blame for any of this. They are government employees just trying to get through life, and deserve none of our anger. That should be reserved for the political appointees and the political interests they are truly serving.

In recent months, I’ve been seeking a second location, where I hope to launch a Muckraker Lager & Ale House. If I’m being completely candid, since the state announced that the restrictions on breweries would go into effect July 1, I’ve begun to seriously rethink whether I should remain in this state. So, I’ve decided to expand my search to include the rich agricultural area north of the imaginary line we know as the New York border.

If my brewery was located across that imaginary line 12 miles to my north, and I used in-state ingredients, New York would consider my brewery a “farm brewery,” even if it was situated in a strip mall, or behind my house. That designation would mean I could make beer and cider, and rather easily add a mead license. I could sell any of the great beer, wine, cider, mead or hard liquor made in the state of New York. As if that isn’t enough, I could open satellite tasting rooms across the state to sell my beer.

Back here in New Jersey, I can only sell my beer where I make it. In other words, if I opened a second location, beer could not be shared among the locations. That’s because … I really don’t know why. It’s just the law? That seems to be the “reason” I’m given more times than you’d imagine.

In New York, even breweries that are not considered farm breweries can make stone-fired pizzas, barbecue or other food, and hold an unlimited number of parties and music events. The laws are similar in Pennsylvania, and both states seem poised to capitalize on New Jersey’s backwardness on liquor laws. Pennsylvania, for instance, appears to be actively courting existing or in-planning New Jersey breweries.

The Drowned Lands, Tin Barn and Shepherd’s Eye have all opened in Orange County, New York, in the three years since we poured our first wild ale. Destination Unknown Brewing Co. of Long Island, just opened Dubco Acres on a large farm in Warwick. My friends at the Oasis (aka Snufftown Hop Farm) are in the process of opening a farm brewery with a full disc golf course. Other breweries in Orange County have expanded and grown, and more are on the way.

The stifling rules of the state of New Jersey are putting my brewery at a competitive disadvantage, and are probably a big reason why you don’t see more breweries here in Sussex County, a place where an agribusiness like a farm brewery could thrive.

When we opened, we committed to becoming part of a larger agricultural ecosystem, one that prizes fresh, local ingredients above style, above trends. Nearly 100% of the beers we’ve produced owe their backbones to barley and wheat grown at Rabbit Hill Farms, a former potato farm in Shiloh that transformed itself into a thriving malt house as New Jersey’s craft brewing scene grew. Today, our friends at Rabbit Hill win prestigious national awards for their grain.

Just this past week, I made the first of what will be several trips down to Pastore Orchards in Hammonton, the blueberry capital of the world, to bring back more than a half-ton of the prized New Jersey highbush blueberry, and of our equally beautiful blackberries. I make trips to Cumberland County for peaches and nectarines, to Morris County for strawberries, anywhere I can get my hands on fresh fruit to use in our beer. My spent grain feeds local cows.

And this cuts to the real tragedy, beyond the restrictions that are on their face ludicrous, and at their core, sinister, lies the death of the-what-could-be. What could a thriving, healthy beer culture look like in New Jersey, and which agricultural businesses could it lift?

Before we can think about that, we have to unpack the tired argument, altogether specious, that I’ve heard ad nauseum: “Bars pay hundreds of thousands of dollars for liquor licenses. Breweries want to act like bars without having to buy a liquor license.”

This is nonsense.

Even a small brewery like mine, producing fewer than 150 barrels of beer each year, will spend hundreds of thousands of dollars on equipment. A larger brewery build-out can push well into seven figures. And we can only sell the beer we brew. If my brewery fails, I can’t even sell my license.

The thousands of liquor license owners in New Jersey can sell any alcohol on the planet that is legally distributed in the state. That’s the whole point of the license. Or, if they want, or their business fails, they can just put the license in their pocket as an investment. They can sell it for a profit. They can put it in their will. They own it forever.

Also, as a practical matter, my brewery, or any of the 140 or so in New Jersey, selling charcuterie, or hosting a weekly food truck, would do no more to hurt the thousands of liquor license holders than a burrito joint opening down the block from any one of them. No law or regulation stops that. If a liquor license holder owns a pizzeria, 97 other pizzerias could open in the same town; they are not protected from that. Their liquor license grants them a monopoly on the retail consumption of distributed beer, wine and hard liquor, not on the sale of food.

Look, I love pubs. But this straw man argument has been used as a cudgel by bars and restaurants that refuse to modernize their beer lineups to bring them in line with what the public craves. The hatred towards breweries is so deep in some corners of the hospitality lobby that a prominent bar owner in that group stubbornly refuses to sell New Jersey-made beer on his lines.

To succeed, pubs should look to the successful beer bars in the state, the ones that build relationships with brewers, who work those relationships to bring special one-off kegs to their pubs or hold tap takeovers and other brewery events. Selling only macro lagers and out-of-state “craft” beer while using regulations as a shield is beyond tired.

So, where do we go from here?

Honestly, the answer is not the same for every brewery. That’s part of the beauty of this industry, but also a cause of some disagreement inside of it. Some want a food truck parked on their property every weekend, others want live music three nights a week, or weekly trivia or goat yoga — everyone wants that one thing they feel most helps their brewery. They should have the freedom to make that choice for themselves.

Personally, I’d like to be rewarded for my brewery’s commitment to using mostly New Jersey-grown ingredients. For Muckraker and breweries like it, the model for the future can possibly be found in the state’s Jersey Fresh program, and a similar model could push brewery expansion into the more rural areas of the state, which always need well-paying jobs, as well as encourage agribusiness and grow a sustainable destination-brewery ecosystem.

Imagine a program modeled on New York’s farm brewery law, under which breweries in, say, Fredon, Long Valley, Pemberton or Upper Deerfield build into their brewery model a commitment to using a substantial portion of New Jersey ingredients. They buy barley, wheat and oats from one of the grain farms that pop up in Cumberland County to meet the demand for in-state malt.

That spent malt is picked up at the end of the brew day by local farmers to feed cows and pigs. The breweries grow some of their own fruit, but the majority is grown by New Jersey farmers across the state — the Rutgers Scarlet strawberry in Bordentown, blueberries from Hammonton, peaches and nectarines starting in the south and making their way north as the season rolls on. Raspberries, plums, cherries, grapes, rhubarb.

The breweries in this program would use New Jersey apples to make cider, New Jersey honey to make mead, and would be able to sell each other’s products in their tasting rooms. The breweries need not be situated on farms, either, which would allow established breweries to participate in the agricultural brewing ecosystem, and reap its benefits, should they choose.

It’s a great program in New York, and makes sense here, given both our agricultural and brewing tradition. But I also understand that we can’t make laws for just a handful of breweries. I’d argue that laws are made for a vision of the future.

That’s my vision for the brewing ecosystem of a state in which I’d happily make a long-term investment. That investment is tenuous at best should this state remain on its current path. I’m just not sure it cares.

What is your vision?

Please reach out to your representative and share it with them, and let’s make sure that they feel the pressure to do what’s right for New Jersey.

Tom Troncone is the founder and head brewer at Muckraker Beermaker in Franklin.





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