The period between 2018 and January 2024 was a time of significant struggle and uncertainty for many craft breweries in New Jersey….

In 2012, legislation was passed that legalized operations of “limited breweries”, which led to a boom in the state's craft beer scene by allowing on-premises sales. However, subsequent rulings and interpretations by the New Jersey Division of Alcoholic Beverage Control (ABC) created a challenging and often frustrating environment. The underlying issue in New Jersey's alcohol landscape was the scarcity and exorbitant cost of traditional retail consumption liquor licenses (which could cost hundreds of thousands of dollars). This created a strong lobbying force from existing bars and restaurants who viewed the lower-cost brewery licenses as “unfair competition”, leading to the extremeluy restrictive and progressively ridiculous brewery regulations between 2018-2024. Here's a breakdown of the struggles faced by breweries during this period:

The "Special Ruling" and its Aftermath (2018):

The Initial Blow (September 2018): The Director of New Jersey Division of Alcoholic Beverage Control (NJABC) issued a "Special Ruling" in September 2018 that sought to “clarify” the privileges of limited brewery licenses. While intended to “level the playing field” with traditional bars and restaurants (who argued breweries had an unfair advantage due to lower license costs), It did exactly the opposite. This ruling imposed significant restrictions and unrealistic barriers for the most vulnerable small businesses in the state and led to a monumental five-year effort to get the laws changed permanently.
Key Restrictions Imposed (2018):

Strict Event Limits: Breweries were limited to a mere 25 "special events" per year (including live music, trivia nights, movie screenings, and even local charity fundraisers). This was a massive blow to taprooms that relied on a diverse event calendar to attract and retain customers, especially smaller operations that primarily sold beer on-site. To add insult to injury, breweries were restricted from advertising events on social media or other platforms, essentially a “gag order” imposed un by the state on the smallest on most vulnerable businesses in our communities.
"Tour Requirement" Enforcement: While the tour requirement had always been on the books, the Special Ruling emphasized its enforcement. Breweries essentially had to perform a perfunctory "tour" before a customer could purchase a full pint, which was seen as an absurd and unnecessary hoop.
Food Truck Prohibition/ Restaurant Coordination Issues: Breweries were expressly forbidden from selling food or even coordinating with on-site food trucks. This meant patrons couldn't easily get a meal with their beer, and breweries lost out on potential revenue and a key draw for customers. Even providing delivery menus from local eateries was initially banned. This is an obvious public safety concern, because not offering food with alcoholic beverages could lead to disastrous consequences.
Limited Non-Alcoholic Offerings: Breweries couldn't sell non-alcoholic beverages like coffee or soda if they didn't produce them on-site, a seemingly nonsensical restriction that further limited their ability to cater to all customers.
TV and Sports Restrictions: There were even limitations on the number and size of TVs and what sports programming could be shown, further hindering the ability of breweries to function as community gathering spots.
Public Backlash and Ruling Suspension: The 2018 ruling immediately sparked an intense outcry from brewery owners, the Brewers Guild of New Jersey, suppliers, vendors, and the public. Specifically, Death of the Fox and Lower Forge Brewing Companies led the charge to garner 35,000 signatures in less than two weeks! Governor Phil Murphy and other lawmakers quickly intervened, leading the ABC to suspend enforcement of the Special Ruling in October 2018 to allow for further stakeholder discussions and potential legislative solutions.

A flyer for the petition campaign driven by The Independent Brewers of New Jersey

The Period of Economic Hardship and Stifled Growth (2019-2022):

Ruling Re-Imposed and Lingering Uncertainty : Despite the suspension, the threat of these restrictions loomed larger. The rules were eventually reimposed by the Murphy Administration in May 2019, with the ABC signaling its absolute intent to enforce them. While the pandemic temporarily pushed these issues to the back burner, breweries operated for three years in a state of uncertainty, unsure when the hammer might drop. Just as breweries were re-opening their tasting rooms and getting back to normal immediately after the pandemic, the state pulled a surprise by codifying 18 rules from the Special Ruling, which went into effect July 1st, 2022 for most breweries, leading to widespread anxiety and frustration across the industry. The results:

Revenue Loss: The event limits, food restrictions, and the general perception of a restrictive environment directly impacted breweries' ability to generate revenue from their taprooms. Many smaller breweries relied heavily on taproom sales and events to stay afloat, as wholesale distribution can be challenging and less profitable.
Competitive Disadvantage: New Jersey breweries found themselves at a significant disadvantage compared to those in neighboring states (like Pennsylvania, New York, and Delaware) that had more liberal laws regarding taproom operations, events, and food sales. This made it harder to attract tourists and local patrons who sought a more complete brewery experience.
Limited Community Engagement: The restrictions hampered breweries' ability to serve as vibrant community hubs. Events like trivia nights, live music, and charity fundraisers, which are common ways for breweries to connect with their local communities, were severely curtailed.
Impact on Small Businesses: The struggles were particularly acute for smaller breweries and nanobreweries, many of which rely almost exclusively on their on-premise taproom sales. Some estimates suggested that the restrictions, coupled with the COVID-19 pandemic, led to the closure of nearly 10% of New Jersey breweries.

The Growing Chorus of Opposition and the the DOTF lawsuit against the ABC (2020-2022)

The struggles faced by breweries led to a powerful and sustained advocacy effort:

The Brewers Guild of New Jersey (BGNJ): Formed in 2018, the BGNJ became the primary voice for the state's independent craft breweries. They relentlessly lobbied legislators, engaged with the ABC, and launched public awareness campaigns, highlighting the economic hardship and competitive disadvantage imposed by the regulations. They argued that the rules stifled innovation, limited job creation, and prevented New Jersey's craft beer scene from reaching its full potential.
The "Battle with the ABC": The relationship between the breweries and the ABC became increasingly strained in 2022 and more breweries and their customers joined the public outcry. Breweries felt the ABC was overstepping its authority by creating rules without proper legislative process or public input, and that these rules unfairly favored established bars and restaurants. The ABC, on the other hand, maintained it was acting to ensure a "balanced marketplace." At the end of 2022, over two dozen New Jersey breweries (and a few out of the state!) brewed a collaboration beer called “Brew Jersey”, to raise money for the fight ahead!
The 18 New Jersey Commandments: Death of the Fox initially led a media campaign that lead brought attention of the issue to thousands of social media followers. We called it the “18 New Jersey Commandments”, and the slide show shared across the state and beyond.

The frustration culminated in direct legal action by one brewery in the state… Death of the Fox Brewing Company:

Death of the Fox Brewing Company vs. NJ Division of ABC (September 2022): This lawsuit, filed by Death of the Fox Brewing Company with the support of the Pacific Legal Foundation (PLF), was a pivotal moment. The lawsuit directly challenged the ABC's "Special Ruling" and its restrictions, particularly on event limits and advertising, arguing they violated the breweries' First Amendment rights (freedom of speech) and due process under the New Jersey Administrative Procedure Act.

The PLF's Argument: PLF contended that the ABC implemented these rules without the required public notice and comment periods, and without legislative review, essentially creating law unilaterally. They also highlighted the discriminatory nature of the rules, which disproportionately affected craft breweries while established bars faced no such restrictions on events or food.
Impact of the Lawsuit: While the lawsuit itself wasn't necessarily concluded with a definitive court ruling that struck down the old laws, its filing and the public attention it garnered were instrumental. It put immense pressure on the state legislature and Governor Murphy to address the issue definitively. The lawsuit garnered national attention, including an OP-ED in the Wall Street Journal. he Wall Street Journal's Stance: The WSJ editorial board strongly supported Death of the Fox and New Jersey breweries. The Journal argued that these rules were burdensome, arbitrary, and violated regulatory procedure. They suggested the rules were designed to protect established businesses (bars and restaurants) by hindering craft breweries' ability to compete. The lawsuit effectively called the ABC's authority and methods into question, forcing a legislative solution rather than a protracted legal battle. It underscored the constitutional infirmities of the regulations and exposed the lack of a proper rulemaking process.

The Tipping Point and the 2024 Reform Law

The persistent advocacy from the BGNJ, the growing number of frustrated breweries, and the pressure from lawsuits like Death of the Fox, eventually created an undeniable impetus for change. In one final step of drama Governor Phil Murphy, who had previously expressed support for the craft beer industry, shocked the industry once again by vetoing the bill!

But the industry continued to press on all fronts and resisted. More public outcry ensued and the date of the Death of the Fox lawsuit hearing was announced in early January. Murphy finally knew he was beat. Murphy signed the bill and brewery reform become law! The signing of Bill S4265/A5912 into law in January 2024 was a direct response to these years of struggle. It effectively negated the most burdensome aspects of the "Special Ruling" and provided the clarity and operational freedom that breweries had long sought.

The legal challenges, by shining a spotlight on the legal vulnerabilities and unfairness of the previous regulations, undoubtedly accelerated the legislative process and ensured that the reform was comprehensive rather than piecemeal. The fight for New Jersey breweries took over 5 years and thousands of hours of effort by a few breweries and thousands of craft beer enthusiasts. We were honored to advocate for our industry and understand there is still much more to do! Rock on and fight the power!

Cheers,

Chuck Garrity, Founder/President- Death of the Fox Brewing Company