OPINION: Breweries Should Not Be Able To Run Cash Bars

By Jack Koumbis, chairman of the New Jersey Restaurant Association

On behalf of the New Jersey Restaurant Association (NJRA) representing over 25,000 eating and drinking establishments, we support State Assembly efforts to help small breweries sell their products. However, the proposed amendment permitting breweries to have a cash bar at the end of their tours leaves us frostier than the beer! Throw in a little “free” food, and we see breweries growing into open “Beer Gardens” that will undermine the value of our liquor licenses.

We favor beer samplings as part of a flat fee brewery tour, but a cash bar should require a liquor license as it always has. New Jersey restaurants have paid dearly for their liquor licenses, in some cases over a million dollars, and it’s not fair to undercut those who have properly paid for this privilege.

Currently breweries are not allowed to have cash bars, and we think this works well for all concerned. Can we imagine the Budweiser brewery in Newark having a cash bar at the end of their tour? We think not.

The NJRA urges the State Assembly to support our position and prohibit the “on premise” sale and consumption of alcohol at breweries, and we’re asking our members to do the same.

In short, we are all for the expansion of a presently very vibrant business model for micro-brews and brew pubs. But any relaxation of Title 33 as it relates to retail consumption or the cash sale of alcohol should remain as it has in this state for many years with great success.

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2 comments for “OPINION: Breweries Should Not Be Able To Run Cash Bars

  1. DS
    June 27, 2012 at 10:43 am

    It isn’t surprising that this “Letter to the editor” is penned by the chairman of the primary lobbying group against a bill that will increase jobs, state revenue, tourism, and more within the borders of New Jersey.

    I’m also not surprised by the fact that he is attempting to use implausible, made up scenarios to try and sway public opinion, which thankfully failed as this bill was passed. The truth is that breweries will have to purchase a new, special liquor license to operate a bar on premise. They will also be limited in the amount they can sell to an individual and ONLY allowed to sell their product and nothing else.

    To present an argument that depicts a brewery becoming a biergarten (and spelling it wrong), or that they will be allowed to sell food, is a complete fabrication. Breweries will not be allowed to sell food on premise with the passage of this law, and they still will not even be allowed to own a brew pub off premise, like they are in Pennsylvania or Delaware. This is something that the NJ Brewers Guild conceded to this particular lobbying group, and now they are going out in public portraying it differently!

    Can I imagine Bud in Newark having a cash bar after tours? No, I can’t, because Bud in Newark (their largest processing facility in the US), does not even offer tours. Most large scale breweries only offer tours at their smaller, more remote, test facilities, not ones like this anyway.

    What Mr. Koumbis fails to talk about in his portrayal of his fair industry is how exclusive it is. Restaurants carry the highest failure percentage of any industry. Liquor licenses range from $75,000 – $1M+ on the current market, because townships have long run out of them and current rights holders use them as a source of profit when their poor business model fails. This prohibits growth within HIS industry and is a deterrent to entrepreneurship. In other words, the current system is broke; it hurts state revenue, job growth and creation, and local economies.

    What Mr. Koumbis also fails to point out is that this bill does not even put NJ on par with surrounding states. NJ Breweries currently operate under archaic laws that have not been revisited in decades, much like other industries within our borders. We are seeing talented workers, investment dollars, and tourism opportunities go to NY, PA, and DE because of better economic climates towards a growing industry.

    – Beer tourism and craft beer are growing industries.
    – A locally made craft beer at a brewpub, on average, costs less than what most popular bars/restaurants charge for mass-produced beverages
    – The only AMERICAN owned breweries in NJ are craft/microbreweries. Drinking a Budweiser from Newark? The people in Germany thank you.
    – Restaurants that are “brew pubs” currently, and will still, require full liquor licenses with the passage of this law.
    – Breweries are required to be zones as manufacturing areas, and thus cannot have restaurants on premise in NJ.
    – To obtain a liquor license currently, an individual must pony up, on average, over $250,000 currently because of restauranteurs using the funds to salvage failed businesses and the legal fees associated with transferring them.
    – NJ is the bottom 5 states in terms of Breweries-per-capita within our borders
    – NY’s laws are more lenient than this current bill will make us, AND they have just passed a tax credit for brewers because of the positive economic impact they have on their communities.
    – The fastest growing craft brewery is located in Delaware, started as a brew pub, and now is in demand all over the world. This bill WILL NOT allow a NJ brewery to take that path, because a place like Triumph in Princeton will not be allowed to open a full scale brewery since they were started as a brew pub.

    It is time you stop looking at what only helps the exclusive few, Mr. Koumbis, and if you are going to present an argument to the public, at least portray it will facts that will allow them to make an educated decision on the topic, not the decision your LOBBYIST group wants.

    • njra
      July 6, 2012 at 6:08 pm

      I’d like to thank the anonymous author for the critical response to our NJRA letter to the editor, as we expressed our Association’s concern over legislation that could allow “Beer Gardens” to grow out of cash bars at breweries.

      As someone who is half German, I also want to thank the anonymous author for pointing out that in Germany, we would be spelling it “biergarten” rather than “Beer Garden.” But we are not in Germany, we are in New Jersey, and here, if you want to sell beer for consumption in the back of your brewery, then you’re a bar, and bars are required to pay (often dearly) for a consumption license.

      Yes, we know that breweries cannot “sell” food, but we should also know that breweries can easily get around this, as customers will naturally want something to go with those micro brews.

      We simply want to respect the rights of consumption license holders while cheering the recent arrival of brewpubs and microbreweries, and respecting their right to sell, and offer free sampling of their products. This is why we recommend making the controlled sampling part of the tour, and charging accordingly to cover the costs associated with that practice.

      Jack Koumbis
      New Jersey Restaurant Association

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