New Jersey microbrewery sues state over regulatory overreach

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A microbrewery is suing New Jersey over license conditions it says severely impede such establishments’ ability to advertise in-house events and grow their businesses.

The company’s lawyers suggest the state is picking winners and losers by siding with established restaurants and alcohol sellers over microbreweries.

Clarksboro-based Death of the Fox Brewing Co. filed suit in New Jersey Superior Court, Appellate Division, on Sept. 21 against the New Jersey Division of Alcoholic Beverage Control’s (ABC) special ruling and license conditions that severely restrict “limited” or craft breweries’ ability to advertise events and grow their businesses.

“ABC’s new rules are a transparent attempt to favor one kind of business—bars and restaurants—over another—craft breweries,” said Caleb Trotter, an attorney at Pacific Legal Foundation (PLF), a national public interest law firm based in Sacramento, California, that is representing the brewery.

In 2019, ABC promulgated a special ruling that imposed sweeping, burdensome, new restrictions on every aspect of craft brewer operations—including forbidding on-site food trucks, regulating how many televisions may be placed in a brewery, and requiring a registry of guests who complete brewery tours.

The restrictions were slapped on breweries on July 1.

According to PLF, the “most troublesome of these new rules” prevents Death of the Fox and other breweries from advertising more than 25 events per year—a restriction the law firm says is a blatantly unconstitutional restriction on free speech. Even worse, the new rules define “event” to include things like open mic and trivia nights, or showing Major League Baseball playoffs—things that plenty of breweries host on a weekly basis.

“What’s more, the restriction on event advertising is an unjustifiable imposition on the free speech of breweries,” Trotter said.

Although microbreweries have become popular nationwide, they are relatively new to the Garden State.

Death of the Fox, founded in 2017, is what is called a “limited brewery” under a New Jersey law passed in 2012, Trotter told The Epoch Times in an interview.

These craft breweries, sometimes called microbreweries, may not produce more than 300,000 barrels of beer per year. The law allows them to offer tasting rooms on-site but they are not permitted to sell food or operate as a restaurant because there is a different category under state law for brew pubs, which are restaurants that can also make and sell a small amount of beer, he said.

Death of the Fox abided by the rules but then in 2018 and 2019, the ABC “out of nowhere,” issued its special ruling interpreting the law, Trotter said.

Doing so created this litany of very detailed and, and some would say, micromanaging, new rules and prohibitions that would severely restrict operations.

One of the worst restrictions limits the breweries from advertising more than 25 in-house events per year, though the regulation does not limit the number of events that can take place. Breweries like Death of the Fox need “this very commonplace stuff” so they can bring customers in on an otherwise slow Tuesday or Wednesday night in January, he said. One of the odder restrictions limits breweries to two televisions that may not be larger than 65 inches each, he added.

Although there are only about 140 microbreweries in New Jersey, the state claims the new regulation was needed to balance competition between microbreweries and all other liquor license holders, Trotter said.

The evidence suggests the state bowed to pressure from the lobbies for bars, restaurants, and liquor stores to impose new regulations on the growing microbrewery sector, he said.

The Epoch Times reached out to New Jersey Assistant Attorney General Alyssa P. Wolfe, who is representing the New Jersey Division of Alcoholic Beverage Control, but did not receive a reply as of press time.

This article by Matthew Vadum appeared Sept. 25, 2022, in The Epoch Times.