Lawmakers hear competing visions for liquor license reform

Supporters want changes to laws first adopted at the end of Prohibition

By: - May 10, 2022 7:02 am

Supporters of liquor license reform say the current laws, which limit the number of liquor licenses one town can have based on its population, are out of date. (Getty Images)

Competing groups pushed Assembly lawmakers to expand the availability of liquor licenses or keep reforms to a minimum as legislators began the state’s latest push to loosen New Jersey’s liquor laws.

Advocates for liquor stores, convenience stores, grocers, and distilleries alternatively urged members of the Assembly’s oversight and reform committee to keep alcohol sales to retailers, expand them to new venues, and broaden the availability or affordability of licenses, all while maintaining value for existing license holders.

“New Jersey law has changed gradually over time, but we haven’t had a major review of our alcoholic beverage laws, and now’s not the time to make piecemeal changes,” said Michael DeLoreto, who testified on behalf of grocer industry group the New Jersey Food Council. “Now’s the time to take a more holistic look at how our laws are structured.”

New Jersey laws enacted after the end of Prohibition limit the number of available liquor licenses to a town’s population. For every 3,000 residents, a municipality can issue a single license.

Those rules, long targets of reformers who argue the strict license limits have slowed economic growth in the state, keep demand for licenses high and push their prices even higher.

“We don’t want to sell vodka. We don’t want to sell bourbon. We don’t want to sell tequila. We don’t want to sell any of those things,” said Sal Risalvato, executive director of the New Jersey Gasoline, C-Store, and Automotive Association. “We want the convenience of people driving home from work to stop maybe while they’re buying their gas … to be able to run inside and pick up a six-pack of beer.”

Pennsylvania allows licensed convenience stores to sell beer and wine, as does New York, but such sales are prohibited in New Jersey.

Gov. Phil Murphy has named liquor license reform as a legislative priority for his second term, arguing more available licenses could jumpstart the state’s post-pandemic economic recovery. But those reforms have their opponents.

Under the current system, the scarcity of licenses can push the cost of them to hundreds of thousands of dollars or more, and existing license holders say they use the value of their licenses to boost retirement funds. Any reforms that expand the availability of licenses would likely push prices down, and lawmakers on Monday indicated openness to reforms that make licenses more affordable without broad changes to their availability.

“These license holders have invested hundreds of thousands of dollars — millions in some cases — into this system as it already exists,” said Amanda Stone, director of government affairs for the New Jersey Restaurant and Hospitality Association. “Additionally, many have used their licenses as security when seeking bank financing. Their established presence in the industry must be acknowledged and carefully considered when developing any potential changes in the future.”

Stone did not take a firm position on the push for changes but noted her group represents businesses with and without liquor licenses. Those without, she said, would welcome more licenses.

Others worried proposals that would allow for alcohol deliveries could cause a surge in underage drinking.

“Some of the reforms that are discussed would go as far as essentially making every doorstep or every cellphone a liquor store,” said Kevin Hagan, a lobbyist for the New Jersey Liquor Store Alliance. “And though that sounds convenient, the problem there is when you’re talking about alcoholic substance, there’s nobody at that doorstep or at that phone to ensure those consumers are 21.”

Hagan said the Liquor Store Alliance supports an alcohol delivery option, but only for licensed retailers.

Other stakeholders urged changes elsewhere in the state’s liquor laws.

John Granata and Mark Elia, who run the New Jersey Craft Distillers Guild, urged lawmakers to allow distilleries to offer food and mixed drinks on their premises, saying the state Division of Alcoholic Beverage Control has denied previous requests to allow food trucks on distillery grounds.

They also pointed to a disparity in tax rates for hard liquor and other alcoholic products. Liquor is taxed at $5.50 per gallon. The rate for wine is just 88 cents. For beer, it’s 12 cents.

“We have seen distilleries win award after award after award for quality. We’ve also lost a few distilleries along the way. We’re winning for quality but contracting for size as far as people that are actually in business,” Elia said. “That’s not a great story to tell in this state.”

Assemblyman Joe Danielsen (D-Somerset), the committee’s chair, said it would hold a second hearing at a later date.

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Nikita Biryukov
Nikita Biryukov

Nikita Biryukov most recently covered state government and politics for the New Jersey Globe. His tenure there included revelatory stories on marijuana legalization, voting reform and Rep. Jeff Van Drew's decamp to the Republican Party. Earlier, he worked as a freelancer for The Home News Tribune and The Press of Atlantic City.

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