Bill designed to give economic boost to N.J. craft brewers, brewpubs

Their names are often a colorful mouthful.

Chuckin’ Punkin Pumpkin Lager (Tun Tavern in Atlantic City);

Grand Cru Winter Reserve (Flying Fish Brewery in Cherry Hill);

Or how about Colonel Blide’s Bitter (Cricket Hill Brewing in Fairfield).

But as wonderfully Dickensean as their products’ names are, that is just how antiquated the laws are that govern their business, say owners of microbreweries and brewpubs.

To address that, Assemblyman Craig J. Coughlin, (D-19), Middlesex, has introduced a bill, A3969, that would loosen some of the production restrictions under which they operate.

“It’s about market forces,” said Coughlin, an admitted fan of a good microbrew. “Hopefully, it will put a few more people to work, create more tax revenue.” 

Time was microbreweries and brewpubs were few and far between, more of a novelty and not making much of a dent in the market share of the mass-production brewers.

Nowadays it seems as if you can’t throw a mug without hitting a shiny new tap.

“Seventeen years ago no one in the state worked in our industry,” said Gene Muller, founder and president of Flying Fish Brewery. “Since then we have 20 breweries and over 600 jobs.’’

According to Coughlin, the employment and revenue figures for such businesses could improve if his bill is passed.

The bill wants to accomplish several things.

1. Increase the maximum annual allowable production for microbreweries from 300,000 barrels to 500,000 barrels (one barrel equals approximately 13.8 cases of 12-ounce bottles/cans of beer);

2. Amend the fees for producing those barrels – $5,000 for producing up to 300,000 barrels annually and $7,500 for producing up to 500,000 barrels annually;

3. Allow microbreweries to sell their products to consumers for consumption on or off the premises, meaning a microbrewery could have a sampling room with taps and bottles;

4. Allow microbreweries to sell their product in up to 10 salesrooms across the state apart from the brewery, for consumption on or off the premises, at a fee of $250 per location;

5. Allow microbreweries to offer product samples of an amount no larger than 4 ounces at the brewery and/or in the aforementioned salesrooms;

6.  Out-of-state microbreweries (maximum production of up to 500,000 barrels annually) would be allowed to apply to the state Division of Alcohol Beverage Control  for the ability to sell their product in up to 10 salesrooms across the state, for consumption on or off the premises, at a fee of $250 per location;

7. Increase the maximum annual allowable production for brewpubs from 3,000 to 10,000 barrels;

8. Reduce to $250 from $625 the fee for every additional production of 1,000 barrels of beer over the first 1,000 for brewpubs;

9. Allow the owners of brewpubs to sell beer brewed on premises at other non-brewpub restaurants that they own; and

10. Remove the two-liquor-license cap per single entity for brewpub owners seeking to purchase additional restaurants in which to sell their product.

“Really, what this does is allow breweries to be treated like wineries,’’ Coughlin said.

Muller, who said he met Coughlin earlier this year during the annual Chamber of Commerce train trip to Washington, D.C., said that current law handcuffs the smaller brewery in New Jersey.

“We drive a lot of tourism,’’ he said of the smaller breweries and brewpubs. “We have over 100 people here every weekend,’’ he said of their facility.

At certain tasting events, they cannot show up with samples but wineries can.  They have to ask a wholesaler to do that for them.

Once, he said, New Jersey was home to more than 50 breweries. No one is predicting that this law, if passed, would translate to the industry reaching those heights again, but he said it would allow those in existence to have more of a fighting chance.

For example, he would like his brewery to expand and possibly add 15 jobs next year if all goes well.

But the costs for the smaller brewers are more of an issue than they are for larger companies. In addition to the higher cost for ingredients (craft brewers typically use more hops and barley than many of the mass marketers), Muller said a bottling line could cost $600,000; a major expansion would cost $4 million to $5 million.

According to Coughlin, entities such as liquor stores and restaurants should not fear increased competition. Muller said the liquor stores have traditionally been a good outlet for the products of microbreweries and he doesn’t foresee that changing.

A companion bill has been introduced in the Senate, S2870, whose sponsors include Thomas Kean Jr., (R-21), Westfield, and Donald Norcross, (D-5), Audubon. Bill designed to give economic boost to N.J. craft brewers, brewpubs