Senate beer booster turns attention to distilling

Nine months after the playing field was leveled for New Jersey's craft breweries, state lawmakers have taken a key step to promote another craft sector in the alcoholic beverage industry – distilling.

On Thursday, a Senate committee advanced a measure that would create a craft distillery license that would help small-batch distillers operate in the Garden State. 

Camden County Democrat Donald Norcross, a key sponsor of last year's legislation that gave craft brewers greater freedom to retail directly to the state's beer drinkers, is a sponsor of the craft distillery bill. 

The measure was advanced by an Assembly panel last month. 

Under the legislation, holders of the license would be allowed to produce up to 20,000 gallons of liquor, provided they certify that 51 percent of their raw materials were grown or purchased in the state. Licensees would be required to include on their labels "New Jersey Distilled."

The license fee would be set at $938, considerably less than the $12,500 paid by Jersey Artisan Distilling, which opened in Fairfield earlier this year to become the only distillery operating and producing liquor with the state's borders since the end of Prohibition 80 years ago. 

Creating the license category with a substantially lower fee is an attempt to kickstart an industry that the bill's sponsors believe could take off in the state much like craft brewing has and offer an economic boost in tax revenues and jobs. Additionally, a few New Jersey craft brewers have in the past expressed interest in having a parallel distilling business if it were ever possible. 

“New Jersey’s current laws make it incredibly difficult for small-scale distillers to do business in the state. With several distillers prepared to open facilities, it’s well past time that we took steps to update our antiquated laws. This will help to facilitate growth of the craft-distillery industry while supporting our agricultural community and creating new jobs,” the senator says in a statement released Thursday by the Senate Democratic majority office.

The legislation (SCS for S2286/S463, A3518 in the Assembly) now heads to the full Senate for consideration. 

Next stop, governor's desk

Vote tally, 39-0

Greater freedoms for New Jersey craft brewers, and the subsequent benefits for their followers – beer drinkers, now come down to a tough-talking, über Springsteen fan who has in the past shown support for homebrewing and craft beer.

Just exactly how Governor Chris Christie will act on the legislation handed off to him on Monday remains, of course, to be seen.

But the Garden State Craft Brewers Association, the industry organization that backed the bills, is optimistic that the governor will sign the bill, endorsing changes to the rules that brewers say have hemmed them in since 1995, the headwaters of the beer renaissance that has seen New Jersey brewery ranks since swell to two dozen.

Still, as the legislation enters this final phase, the opposition that has trailed it upon its introduction earlier this year isn't going away. The powerful New Jersey Restaurant Association is likely to seek the governor's ear and appeal to him to veto the bill, renewing its complaints that the proposed regulatory changes fly in the face of the three-tier system governing alcoholic beverages.

The association contends the changes would diminish the value – think six and seven figures – of licenses that bars and restaurants hold to serve beer, wine and liquor.

So, supporters of craft beers brewed in the Garden State will just have to stay tuned. But there are some significant things to consider.

Coming on the heels of Saturday's 16th annual guild beer festival aboard the USS New Jersey, Monday's Senate action sent the craft brewing bill to Governor Christie with a 39-0 vote; last Thursday (June 21), the Assembly gave its stamp of approval, 64-13.

Those wide vote margins should play to the guild's favor with the governor's office. And the economics of giving the state's craft brewers a freer hand command attention as well.

For instance, as with the opening of its Maple Shade location three years ago, Iron Hill brewpub projects it will create 100 jobs when it opens its second New Jersey pub in Voorhees around the end of this year. (Iron Hill has nine locations spread among Delaware, New Jersey and Pennsylvania.)

Under the current craft brewing regulations, brewpubs are cut off after two establishments (and thus Voorhees would theoretically cap the number of jobs Iron Hill could create in the state). But the measure (A1277/S641) passed last week and Monday would allow brewpubs to operate up to 10 establishments and sell their beers through distributors.

Outside Senate chamber, after the vote

(The legislation also would allow production breweries to retail beer to tour patrons for consumption on and off-site. Right now, the most you can buy upon touring a New Jersey craft brewery is two six packs or two growlers. If the governor signs the bill, that would retail limit would become a 15-gallon keg.)

Additionally, and this is perhaps a reflection of the continued vibrant national market for craft beer, some of the Garden State's newest breweries, specifically ones launched last (Cape May Brewing, Carton and Kane Brewing), have added assistant brewers, sales staff or tasting room employees on their payrolls, all before crossing the threshold of being in business a full year.

Meanwhile, Flying Fish Brewing is on the verge of launching its new $7 million automated brewery in its new home of Somerdale. (Last October, Lieutenant Governor Kim Guadagno paid a visit to Flying Fish.)

So with that those circumstances as a backdrop, all eyes turn to the governor, an outgoing guy known for batting down critics, tough talk at town hall forums he's held across the state, and his preference for taking in a Bruce Springsteen concert over prepping for a campaign debate.

To his credit, the governor signed legislation in January to dump a 20-year-old state regulation that obligated homebrewers to obtain a permit to make beer in their backyards and garages. In May 2011, he also signed a proclamation declaring the second week of that month Craft Beer Week in New Jersey, to coincide with a national observance.

Again, stay tuned. A new era of craft brewing in the Garden State is closer to reality than it has ever been.