New restrictions limiting the number of social events breweries can hold in New Jersey are being challenged in court by a Gloucester County craft brewery.
The death of Fox Brewing Co., which has operated a combination brewery and coffeehouse in Clarksboro since 2017, filed a lawsuit Thursday alleging the state’s Alcoholic Beverages Control Department failed to follow proper procedures before it issued the regulations by special decision.
The ruling, which came into effect in July, limits breweries to holding 25 on-site events and 52 private parties per year. They also cannot attend more than 12 outside events or work with food vendors, including food trucks.
The ruling, completed in 2019, also outlines the definition of those events. For example, any on-site activity that involves live music or DJs is considered an event. And while breweries can broadcast televised events — like the Super Bowl — they count as events when promoted on social media. The ruling also requires all brewery patrons to tour the facility before purchasing or consuming alcohol.
The ruling was intended to even out competition between breweries and bars and restaurants, which have to buy expensive liquor licenses to sell alcohol. Breweries can sell alcohol with a limited license for consumption thanks to a law passed in 2012.
When the special rule was introduced in 2019, ABC acting director James B. Graziano told FOX29 that “legislators never intended to give the craft breweries with the limited licenses the same privileges as a sports bar or a restaurant.” ”
“ABC’s new rules are a transparent attempt to favor one type of business — bars and restaurants — over another — craft breweries,” said Caleb Trotter, an attorney with the Pacific Legal Foundation, which represents Death of the Fox. “Moreover, the restriction on event advertising is an unjustifiable restriction on the breweries’ freedom of expression.”
Trotter told NJ Indy that the rules violate New Jersey’s Administrative Procedures Act. The law provides that persons “directly affected” by a decision should be given a reasonable opportunity to submit data and arguments in any proceeding involving proposed regulations. The ABC must go to lawmakers for approval and meet a public comment period, Trotter said.
“Government agencies cannot just make rules behind closed doors without transparency or an opportunity for public participation,” added Luke Wake, attorney with the Pacific Legal Foundation. “State law requires that if a government agency wants to impose rules that affect our lives and livelihoods, we must at least have an opportunity to voice our concerns. And the authorities need to provide regulations to the legislature — who can decide whether to override this species agency action.”
Prosecutors declined to comment on the lawsuit.
An ABC spokesman told KYW in July that the provisions in the special rule were not new and that they had coordinated with several companies to draft them.
Since the restrictions were put in place, Death of the Fox has been at the forefront of the fight to have the sentence overturned, encouraging frequent customers to urge their elected officials to do something to protect the breweries.
Chuck Garrity, who co-owns Death of the Fox with his wife Kat, said the purpose of their lawsuit is to restore microbreweries’ right to sell beer on their properties and ensure government accountability and transparency.
Due to opposition from business owners and state residents, a handful of bills were introduced in the General Assembly that would repeal or amend the special rule.
Assembly speaker Craig Coughlin, a Middlesex County Democrat, told the New Jersey Monitor that changing the current brewery licensing system won’t happen overnight, but that lawmakers are poised to make some of the changes quickly.