Governor Murphy’s Call for Liquor License Law Reform

On January 10, 2023, Governor Phil Murphy delivered his State of the State Address, announcing long-awaited liquor license law reforms. Gov. Murphy named liquor law reform as a top priority and provided some insights into his reform plan. Specifically, Gov. Murphy aims to make the laws more fair by expanding availability and lowering costs.

Currently, local governments are allowed to issue one liquor license for every 3,000 residents. Gov. Murphy proposed that, “over the next few years, we gradually relax this requirement and expand the number of available licenses until the restriction is eliminated in its entirety and the market can work freely.” Further, Gov. Murphy called for the removal of licensing and operating restrictions on breweries, distilleries, and wineries. Finally, Gov. Murphy proposed a tax credit to compensate existing license holders.

The Administration projects that reforming liquor license laws will create over 10,000 jobs annually, generate up to $10 billion in new economic activity over the next 10 years, and generate up to $1 billion in new state and local revenues. The New Jersey legislature is already considering numerous liquor license law reform bills that address Gov. Murphy’s proposals and more.

Bill S350/A878 establishes a restricted beer, wine and cider license that would allow restaurants, for a small annual fee, to sell certain alcoholic beverages to their patrons. In an effort to counteract the diminution in value of already owned liquor licenses, the proposed bill provides tax credit under corporate business tax and gross income tax for loss in value to certain alcoholic beverage licenses.

Bill S355/A3710 seeks to make permanent a temporary enactment allowing certain alcohol retailers and manufacturers to sell and deliver alcohol and mixed drinks. The Bill proposes to allow the holder of plenary retail consumption licenses, hotel or motel licenses, seasonable retail consumption licenses, or concessionaire permits to sell and deliver mixed cocktails in closed and sealed containers for consumption off the licensed premises. Further, it allows craft distillery licensees to sell alcohol that is manufactured on the premises and mixed with other alcoholic or non-alcoholic beverages for consumption both on and off the licensed premises. The delivery privilege extends to the holder of a limited brewery license, plenary winery license, farm winery license, craft distillery license, and cidery and meadery license.

Bills S1332, S2347, and A2689 remove the requirement that limited brewery and distillery licensees provide tours when selling certain alcoholic beverages to consumers and permit the sale of certain foods on premises. Bill A2690 allows craft distilleries to sell mixed drinks and mixed drink ingredients for consumption off the licensed premises and authorizes direct shipping by craft distilleries. Bill S2622/A3709 permits certain breweries, wineries, cideries, meaderies, and distilleries to sell each other’s products on licensed premises.

At this time, it is unclear whether Gov. Murphy intends to move these bills and similar legislation forward or plans to introduce his own legislation. In the meantime, the Senate and Assembly continue to review proposed bills that would significantly reform liquor license law. Those who currently own liquor licenses and prospective buyers alike should be prepared for big changes in the industry!

For more information regarding these proposed changes and what you can do to best position yourself, please contact firm Counsel Bruno Genova, Esq. via email here, Associate Sydney M. Schubert, Esq. via email here, or call 973.533.0777.