Monday, June 18, 2012

Guild legislation gets 2 more OKs in Trenton

Legislation that would give New Jersey craft brewers a freer hand when doing business on Monday cleared two more committees, passing the state Senate Budget and Appropriations Committee without comment, but again encountering opposition from the state's restaurant association before a corresponding Assembly panel.

Though less vociferously than during Senate and Assembly committee hearings held in March and earlier this month, the restaurant association cited the three-tier system in renewing its complaints against the legislation.

The three-tier system was put in place after the repeal of Prohibition, requiring producers to sell through wholesalers, who sell to retailers, who in turn sell to consumers. The system was set up to prevent abuses and ensure competition, but critics say it has had a countereffect in the era of craft brewing, with small producers being denied access to markets.

(Washington State is the only state in the country where producers can sell directly to retailers. The three-tier system also gets blamed by critics for adding to the cost of beverages bought by consumers.)

The bills (S642 and A1277) put forth by the Garden State Craft Brewers Guild, the umbrella organization that represents most of New Jersey's small-batch brewers, would allow brewpubs to own up to 10 establishments (the current limit is two) and sell beer through wholesalers, and allow production breweries to sell beer to tour patrons for on- and off-site consumption.

The restaurant association maintains the legislation turns production breweries into bars and package goods stores. The organization has complained that allowing brewpubs to exceed two establishments is also an erosion of the tier system.

Nonetheless, the bills were advanced by both appropriations committees with a dozen votes from each panel, clearing the way for votes by the full Assembly and Senate. When those votes could take place isn't immediately known.

Monday's vote was largely housekeeping on the part of the Legislature since the bills would also raise the ceiling for the amount of beer that brewpubs and production brewers can make, and that has a bearing on the state budgeting process and potential revenues (i.e. fees and taxes).

The vote was also the second time this month that the legislation got a thumbs-up from lawmakers. Ten days ago, members of the Assembly's Law and Public Safety panel gave the bill the green light. A similar committee in the Senate approved the bill in March.

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