Signed into law on January 16, 2024, by New Jersey Governor Phil Murphy, S-4265/A-5912 promises to categorically alter the alcoholic beverage industry.
This legislation was crafted to resolve long-standing friction between the legacy food and beverage industry and the craft breweries, meaderies and cideries exploding in popularity over recent years.
Expanded Availability of Licenses
Among the most significant aspects of this new legislation is the introduction of an expiration period for liquor licenses that have not been actively used in connection with the operation of licensed premises for two years. Subject to meticulous proposal, bidding and appraisal requirements, these expired licenses may be transferred via private sale or transferred to neighboring municipalities in connection with economic redevelopment plans. These inactive licenses historically restricted the supply of available liquor licenses, dramatically increasing their cost.
A new category of license for food and beverage establishments within shopping malls is now available, with up to four licenses being made available to establishments in shopping malls larger than 1.5 million square feet and up to two licenses for establishments in malls larger than 750,000 square feet.
Easing of Restrictions
This legislation also eases many of the activity restrictions applicable to certain licensed craft beverage manufacturers. Subject to certain restrictions, craft manufacturers are now permitted to host an unlimited number on on-premises events and up to 25 off-premises events each year. In addition, they may coordinate with food vendors and offer snacks and nonalcoholic beverages for sale. Tableside service by waitstaff is now permitted, and breweries and distilleries are no longer required to compel guests to take a tour prior to selling products for consumption on premises. Also, production limits are increased for certain breweries (up to 300,000 barrels from the prior limit of 10,000).
Insurance Coverage a Factor
These new economic opportunities demand that stakeholders across the industry must stay informed and be prepared to adapt. Beyond licensing and compliance considerations, businesses expanding their scope of operations should consider potential impacts on liability, property and other insurance coverages.
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