Wednesday, January 13, 2010

A thawing of the ice?

Looks like some regulatory ice is melting for New Jersey brewers.

Earlier this month, a measure that would allow beer samplings (liquor, too) at packaged goods stores (and bars) easily cleared the state Assembly. The state Senate approved it last summer. With bipartisan support, it's hard to imagine the legislation not being signed into law by the governor. (It may well have been signed already. With the transition from Jon Corzine to Chris Christie this week, action by the governor's office hasn't been in sync with updates on the state Web site.)

Groups tracking the legislation have said the change could take effect as early as May. However, it's important to note that legislation in New Jersey usually takes effect four months after signing. Such is the minutiae details of the Statehouse.

How it works
It goes like this: Tastings could be conducted twice a month at packaged good stores and bars (the plenary retail consumption and retail distribution licensees), with patrons being allowed four 3-ounce samples. Beer to be sampled must be from the stores' stock (which probably translates to those stores wanting brewers to donate the beer).

Obvious restrictions also apply, meaning no minors and no samples after hours. There are some well-duh restrictions, too: Tastings must be done on the licensees' premises (it's not like they're going to come to your house to give you samples).

If we're reading the bill correctly, breweries would be allowed to assist in the samplings, but distributors would not. Looks like breweries (designated "manufacturers" in the bill) wouldn't be relegated to standing there and just smiling. The language of the legislation doesn't specify they can't pour, as are the rules at all of the beer festivals except the annual Garden State Craft Brewers Guild festival, which enjoys special dispensation for that event.

Two schools of thought

So how big of a deal is this? Depends on whom you ask.

Some brewery owners are doing a happy dance at the thought of a rule change, seeing it as a chance to fan out to points of purchase, engage customers and give them the Pepsi challenge – putting their beers up against the plethora of brews from around the country and world that wind up on the shelves. (OK, we embellish there. It would not be side-by-side tasting.)

Garden State brewers are very confident about their beers, and point out Jersey-made brands lack not quality but the exposure that mainstream marketing can bring. Reaching out to the retail customers, they say, can go a long way toward turning around that exposure problem. And if nothing else, the added marketing dimension is better than the current system in which store patrons cannot try before buying.

On the flip side, though, waits a numbers dilemma. And the likes of Budweiser.

Some brewers wonder if there is sufficient bang for the buck and the labor involved. If they have to give away two cases of beer to hundreds of packaged goods stores for sampling two times a month, things could get pricey, not to mention cut into inventory. And practically every production craft brewer in the state right now is running at capacity and could stand to expand. On top of that, not all folks showing up at liquor stores are there to buy beer.

Meanwhile, there's Bud. And Miller. And Coors. Any one of the monster-sized beer producers can outspend the little guys and go after customers with samples from their portfolios of imports and craft brews produced under labels not widely known to be under their banners. (That Spaten Optimator or Bass ale you just drank is in the AB-InBev stable.)

Nonetheless, most Jersey brewers are up for the opportunity to greet the beer-drinking public where they buy. Sometimes underdogs win. So stay tuned.