The Division of Alcohol Beverage Control (ABC) has proposed three new regulations and amendments to existing rules, that include a Special Permit to Hold a Consumer Alcoholic Beverage Festival Event, Limited Brewery Rules, and Craft Distillery Regulations. Please review the regulations with your public safety and economic development professionals as well as your municipal clerks to determine any local impact.
Special Permit to Hold a Consumer Alcoholic Beverage Festival Event
ABC proposes a new rule at N.J.A.C. 13:2-5.38 that would establish a special permit to be issued to certain qualified applicants who seek to conduct consumer alcoholic beverage festival events.
This new permit requirement is aimed at educating the consuming public on aspects of the alcohol industry. The permit would authorize a permit holder to conduct a Festival where attendees may sample wine, beer, mead, cider, and distilled spirits.
Special permits have been issued on a temporary basis pursuant to the special rulings authorizing issuance of temporary festival permits for approximately 10 years, and as described in the special ruling, the ABC is now proposing a new rule to codify this permit requirement and the associated privileges and operational requirements for the permit holders. The proposed fees are based upon the statutory amounts pursuant to N.J.S.A. 33:1-74.
Limited Brewery Rules
The proposed new rules, which recognize the expanded privileges afforded to craft manufacturers, including limited breweries, pursuant to P.L. 2023, c. 290, are intended to establish a uniform set of standards that are applicable to all limited brewery licensees operating in the state and that further the legislative purposes of Title 33.
The purpose of Title 33 is to ensure that alcohol is regulated in a manner that protects the health, safety, and welfare of the people of this state; to protect and encourage competition and trade stability; to protect consumers against fraudulent and misleading practices; and to ensure that taxes imposed on alcoholic beverages are properly collected.
ABC is also proposing several amendments to the alcoholic beverage rules at N.J.A.C. 13:2 to conform to the ABC’s regulatory standards and business practices, pursuant to P.L. 2023, c. 290. Specifically, ABC proposes to amend N.J.A.C. 13:2-9.4 to clarify that a failure to submit information as part of an “administratively complete application,” as defined through this rulemaking, by a specified time, constitutes a withdrawal of the application.
Additional amendments are proposed at N.J.A.C. 13:2-29.1 and 29.2 to clarify established ABC practices that certain information required as part of an “administratively complete application” is confidential and, therefore, not subject to disclosure pursuant to the Open Public Records Act. In addition, the ABC proposes to amend the restricted brewery regulation at N.J.A.C. 13:2-34.2 to reflect the increased production capacity afforded to restricted breweries at amended N.J.S.A. 33:1-10(1)c and to make the fees and capacity limitations in the regulation consistent with the statute.
Additionally, the ABC proposes an amendment to the restricted brewery regulations at N.J.A.C. 13:2-34.4 to correct an error in the existing regulation and to conform the regulation to the consumer tasting and sampling statute at N.J.S.A. 33:1-12d.
Finally, the proposed amendment at N.J.A.C. 13:2-34.4 makes clear that the sale of packaged goods for off-premises consumption may occur only from the public barroom at two retail locations, as required by N.J.S.A. 33:1-12.23 and 33:1-12.31.
Craft Distillery Regulations
ABC is proposing new rules at N.J.A.C. 13:2-46 that govern the activities permitted and prohibited pursuant to a craft distillery license, pursuant to N.J.S.A. 33:1-10(3)(d), as amended at P.L. 2023, c. 290 (codified at N.J.S.A. 33:1-10b). The proposed new rules, which recognize the expanded privileges afforded to craft manufacturers, are intended to establish a uniform set of standards that are applicable to all craft distillery licensees operating in the State and that further the legislative purposes of Title 33.
The purpose of Title 33 is to ensure that alcohol is regulated in a manner that protects the health, safety, and welfare of the people of this state; to protect and encourage competition and trade stability; to protect consumers against fraudulent and misleading practices; and to ensure that taxes imposed on alcoholic beverages are properly collected. N.J.S.A. 33:1-3.1b (1), (3), (4), (6), and (7). Pursuant to N.J.S.A. 33:1-39, the Director of the Division of ABC (Director) has the authority to make rules, regulations, special rulings, and findings that are “necessary for the proper regulation and control” of the manufacture, sale, and distribution of alcoholic beverages.
On January 16, 2024, P.L. 2023, c. 290 was signed by Governor Murphy, following unanimous approval by both houses of the New Jersey Legislature. P.L. 2023, c. 290 significantly modified the retail privileges granted to craft manufacturers, including craft distilleries. ABC now seeks to promulgate rules implementing this law through a formal notice and a 60-day comment period; therefore, a rulemaking calendar is not required pursuant to N.J.A.C. 1:30-3.3(a)5.
The proposed new rules establish clear standards on how to obtain a craft distillery license, and they set forth the privileges of a craft distillery licensee both on and off their licensed premises. Specifically, the proposed new rules set forth permitted and prohibited activities in the tasting room of a craft distillery. The proposed new rules also establish the standards for private parties and social affairs events held on the premises of a craft distillery, formalize the process for obtaining a permit for activities sponsored by craft distilleries off their licensed premises, and establish the guidelines and standards for coordination between craft distillery licensees and food vendors.
In addition, ABC is proposing new rules that would govern the labeling of craft-distilled alcohol to help consumers better understand the product they are purchasing. Finally, ABC is proposing rules addressing an industry-wide practice known as “contract distilling,” including the requirement that the practice must be authorized by a permit. This permit is designed to ensure that this practice comports with P.L. 2023, c. 290.
While each of these proposed regulations and amendments requires sign-off and approval by the municipality and municipal chief law enforcement officer, the League is concerned about the limited timeframe to accomplish these goals.
The League is reviewing these proposals to decide whether commenting is warranted. If you choose to comment prior to the November 1 deadline, please share what you sent to Paul Penna at ppenna@njlm.org.
Contact: Paul Penna, Director of Government Affairs, ppenna@njlm.org, 609-695-3481, x110.