New Jersey ABC Lawyer Blog

New License Will Allow Wineries to Ship Directly to NJ Residents for First Time: Division of Alcohol and Beverage Control(ABC) to Oversee

Thu, 03 May 2012 13:00:50 -0500

New License Will Allow Wineries to Ship Directly to NJ Residents for First Time: Division of Alcohol and Beverage Control (ABC) to Oversee

Wineries throughout the country will now be able to ship wine directly to New Jersey residents for the first time. The law also allows for licensed retail establishments to open tasting rooms in New Jersey, provided they obtain the necessary license issued by the Division of Alcoholic Beverage Control (ABC). The new license was signed by New Jersey governor, Chris Christie, in January of 2012 ends nearly 9 years of litigation and legislative debate over direct shipping.

Attorney General Jeffrey Chiesa said, "New Jersey residents will now have another convenient way to purchase the excellent wines offered by our many fine Garden State wineries, as well as wineries throughout the country."

Eligibility for an "Out-of-State Winery License" will require that the winery already possess a current and valid winery license issued by another state. The winery also must not produce more than 250,000 gallons per year and shall now own any interest in a winery that produces more than 250,000. Furthermore, the winery may only ship products it has actually manufactured and cannot be a middleman. The law also requires that all products shipped and sold are brand registered in NJ. Shipments are limited to no more than 12 cases per year, per person (21 years of age or older), for personal consumption only. Applicants for the license will pay an annual fee ranging from $63 to $938 depending on yearly production.

COMPLIMENTARY DRINKS IN NEW JERSEY? NO SALE OF LIQUOR BELOW COST: HOW COST IS CALCULATED?

Wed, 25 Apr 2012 11:21:33 -0500

COMPLIMENTARY DRINKS IN NEW JERSEY? NO SALE BELOW COST: HOW COST IS CALCULATED

Much of New Jersey's laws from the Department of Law & Public Safety: Office of the Attorney General: Division of Alcoholic Beverage Control (ABC) deal with how and with what methods bars (retail licensees) may offer complimentary drinks. The general rule is that a licensee cannot sell any alcoholic beverage, whether in original package or by the drink, which would fall below the cost of that beverage to the retail licensee.

Cost to the retail licensee is determined by the actual total price on the invoice from the wholesaler. This price shall include all applicable taxes. Then, the cost of the given bottle or drink is determined by dividing the total price by the number of bottles or single drinks included in the total figure. If the cost figure works out to a fractional cent, the lowest amount at which the bottle or drink may be sold by the retailer is the next highest cent. Then, the invoice is determined by the last-in-first-out method that is generally utilized by accountants and book keepers.

Not included in the law prohibiting the sale of alcohol below cost is complimentary drinks. While generally prohibited, there are three (3) exceptions under which it is allowed:

A retail licensee may "buy a drink" for a patron as a gesture of good will. This is a long-standing practice that is allowed so long as the retail licensee does not advertise the practice of buying a drink based on the purchase by the patron of a certain number of drinks.

A retail licensee may also utilize "free drink coupon." Only one open container drink per day per patron is allowed through utilization of a coupon or similar advertising device.

A retail licensee may also include one alcoholic beverage drink to be given complimentary with or included in the price of a meal. In this situation, the licensee is allowed to advertise the fact that the drink is complimentary to the meal. However, the patron must be allowed the option of choosing a non-alcoholic beverage in lieu of the complimentary drink. Furthermore, only one free or complimentary drink can be offered with the meal.

What Is New Jersey Law On "B.Y.O.B." (Bring Your Own Bottle)?

Tue, 24 Apr 2012 09:36:03 -0500

What Is New Jersey Law on "B.Y.O.B." (Bring Your Own Bottle)?

In New Jersey, customers of an unlicensed reataurant may be permitted by the restaurant to bring their own wine or beer unless there is as municipal ordinance prohibiting it. However, restaurant owners may not advertise the fact that they are a B.Y.O.B friendly restaurant. They also may not allow customers to bring liquor or hard alcohol to the restaurant. They may supply glasses, ice, etc. but cannot impose a cover charge, corkage charge, or service charge for any services related to supplying these items.

Furthermore, the restaurant must operate diligently and prevent anyone under the age of 21 years old from drinking. Similarly they must not allow any person who is visibly or apparently intoxicated from further drinking on the premises. In no event should a non licenses restaurant attempt to build a relationship with a distribution licensee for free delivery of wine and beer to its customers. Any violation of New Jersey B.Y.O.B laws constitutes a disorderly persons offense that will be prosecuted in municipal court.

Jackson Township Plenary Retail Consumption License for Sale Through Public Bid!

Mon, 19 Dec 2011 11:13:08 -0500

Municipalities in New Jersey have the ability to issue new liquor licenses as the population grows. New Jersey municipalities can offer one plenary retail consumption liquor license (used for a bar, tavern or restaurant) for every 3,000 residents. The population has grown significantly enough for Jackson Township to offer such a license. Resolution number 394R-11 outlines Jackson's intent to sell a liquor license to the highest bidder in a public sale.

In order for Jackson to successfully execute the public sale, it will adhere to the strictures of N.J.S.A. 33:1-19.3 and N.J.S.A. 33: 1-19.4. The Title 33 statutes outline the proper procedure for bidding and even permit the issuing township to place conditions on the sale. In this case, Jackson has conditioned the sale upon the opening of a restaurant in which at least 65% of the seating will be restaurant style tables.

N.J.S.A. 33:1-19.4 outlines the proper procedure to accept and evaluate bids. In keeping with the statutory intent, the Jackson Township Clerk will review all applications for the license to determine if the bidder is in fact qualified under the statute. The bidder must present qualification materials stating that he/she is qualified under New Jersey Statutes pertaining to liquors, the rules and regulations of the Alcoholic Beverage Control Commission (ABC), and meets the requirements of the resolution granting the sale (the restaurant condition). The above materials must be placed in one envelope while the actual bid should be placed in another. Both envelopes must be presented together. The Township Clerk must then review the bid application materials and determine who is qualified no later than 5 days prior to the opening of the bids.

Jackson Township has specified that the minimum bid for the new liquor license will be $350,000.00.

Decline In The Economy Leads To The Availability And Reduced Prices Of New Jersey "Consumption" Liquor Licenses.

Thu, 20 Oct 2011 08:01:22 -0500

Largely due to the decline in the economy, liquor licenses in New Jersey are becoming more available and affordable than years past. New Jersey municipalities can offer one plenary retail consumption liquor license (used for a bar, tavern or restaurant) for every 3,000 residents and one plenary retail distribution liquor license (used for a liquor store) for every 7,500 residents. (N.J.S. 33:1-12.14). Fifteen years ago, that worked out to be approximately 15,000 licenses statewide. Today, there are 9,321 licenses that currently exist. Of that current number, 1,211 are inactive or as they are commonly called, "pocket licenses".

Municipalities in New Jersey have the ability to issue new licenses as the population grows. Liquor licenses are sold through "person-to-person" license transfers; much like the sale of real estate. Some municipalities in New Jersey record these transfers while others do not. One can speculate that the 1,211 "pocket licenses" might be up for grabs and the high availability or supply of these licenses can lead to sharp reductions in price. In Union County, the prices have declined by an average of 35 percent over the past 5 years. In Cherry Hill, a previously valued $1.6 Million liquor license was auctioned off for $500,000; a devaluation of 68.75%. This seems to be the common story statewide. However, there are some municipalities that seem to be immune to the economic downturn. These municipalities include: Brick, Toms River, Freehold, Eatontown, East Brunswick, Edison, Woodbridge, Bridgewater, South Plainfield, and Piscataway.

Although the sale and consumption of alcoholic beverages are up in New Jersey, the small businesses that have the potential to capitalize are not in a position to buy the liquor licenses in order to capitalize on the trend. This only increases the likelihood that the "pocket licenses" are still available at a deep discount. Anyone in a position to capitalize on the market will undoubtedly have to navigate a highly controlled market riddled with regulations, procedures, red tape, and in some cases, complex negotiations. Prospective buyers and sellers of inactive pocket licenses are urged to contact a New Jersey ABC attorney experienced in handling liquor license negotiations and the liquor license transfer process.

New Jersey Liquor Store Owners Caught Selling Alcohol To Minors During the Summer Months. Call an Experienced New Jersey ABC Attorney for Help!

Tue, 09 Aug 2011 08:41:26 -0500

Given the recent spike of underage drinking, fake ID, and other related charges written in Monmouth County and Ocean County, it is not surprising that liquor license owners, bartenders, and managers are worried. There is a heightened need among owners to hire bouncers, off-duty police officers, and experienced individuals to check ID's at the door and at the bar because the penalties to the New Jersey liquor license owner for a violation of selling to an underage person can be quite stringent.

In a recent article, a Liquor License owner in New Jersey faced charges of selling alcohol to minors. According to one source, the owner's retail liquor store was known around town as the "easy" store to get alcohol if you are under age. Given its reputation, local government and law enforcement officers were understandably engaged and concerned and stepped in to persuade the Division of Alcoholic Beverage Control (ABC) to crack down hard on the owner. Because of the attention given to the case, it was discovered that the owner's establishment had two prior incidents involving the sale of alcohol to minors. It was also discovered that the New Jersey ABC allowed the owner to pay a fine instead of imposing a license suspension.

According to New Jersey Administrative Code (N.J.A.C.), the NJ ABC Director has some discretion in how to approach this type of charge. According to N.J.A.C. 13:2-23.1(a), a liquor license owner has 30 days to enter a plea to the charges. If the 30-day period passes without a plea or reasonable request for an extension, the Director can impose a 15-day license suspension on the owner without further warning. If the plea is within the deadline and is either a "guilty" or "non vult" (no contest) the license suspension for a first offense of selling to a minor over 18 and under 21 is 15 days. For a second conviction it is 30 days, for a third it is 45 days, and for a fourth, the license can be revoked altogether. If, however, the person served was under 18, a "30-day, 60-day, 90-day, revocation" schedule for first through fourth violations will be imposed.

In some cases, the license suspension can be converted to a fine so that the doors of the bar or liquor store can stay open. This, however, is at the discretion of the ABC Director. Also at his discretion is the appropriate number of days to suspend the license or in the alternative, how much of a fine to impose. There are other creative ways in which the ABC Director can improve the establishment such as mandating the installation of an ID scanner, forcing all employees of the license holder to be trained by the State to identify Fake ID's, and forcing the owner of the license to have more of a presence at the establishment under scrutiny.

In addition to serving alcohol to minors, N.J.A.C. 13:2-23.1 also grants the NJ ABC power to impose the same license suspension periods or fines on bars that "over-serve". This provision forces bartenders, managers, and license holders to identify patrons that have had too much to drink. According to the ABC, failure to cut off already intoxicated patrons could lead to more car accidents, crime, and even severe injury or death to the patron. Again, the ABC Director is given carte blanche as the best way to impose a penalty on the establishment.

Howell Township Accepting Bids For Liquor License

Fri, 15 Jul 2011 09:17:06 -0500

For every extra 3,000 people that reside in a town, one more plenary retail consumption license may be issued. (New Jersey Statute 33:1-12.14). This is exactly where Howell Township found itself after the 2010 census, which estimated the township's population at 51,075. As a result, Howell has opened a liquor license up for public bid, accepting bids starting at $1.1 million. This liquor license must be used in conjunction with a restaurant which seats at least 100 people and those interested must send a completed ABC license application form, certificate of proof of compliance with Howell's requirements along with a $110,000 certified check by August 15th to the Township of Howell. If a bidder passes this prequalification process, they must then turn in their actual bids by August 29th.

For further information regarding the bid process you should contact the Howell Township Clerk's Office.

New Jersey Bars, Clubs and Restaurants Beware: New Jersey Supreme Court Allows Dram Shop Claim To Continue For Injuries To Visibly Intoxicated Patron Who Crashed Motorcycle

Thu, 02 Jun 2011 14:24:11 -0500

On November 9, 2006, Frederick Voss was injured when his motorcycle collided with a vehicle operated by Kristoffe Tranquilino in Toms River, New Jersey. Voss, whose blood alcohol content was nearly two and a half times the legal limit at .196, pled guilty to DWI. Mr. Voss then filed a dram shop claim against Tiffany's Restaurant, alleging that before the accident they had served him alcohol even though he was visibly intoxicated.

Historically, dram shop acts make establishments which sell alcoholic drinks to visibly intoxicated patrons strictly liable to anybody injured by the drunken patron. N.J.S.A. 2A:22A-1 to -7, New Jersey's Dram Shop Act, was created with three objectives in mind. First, the Legislature wanted to carefully define the limits of liability for liquor licensees, such as Tiffany's Restaurant, making liability coverage for such establishments more available and affordable. Second, the statute was made to encourage liquor licensees to be careful in their service of alcohol, warning them of liability when serving alcohol to visibly intoxicated patrons. Third, the statute was made to allow for recovery by victims who have been injured as a result of a liquor licensee's negligent service of alcohol.

Tiffany's Restaurant moved to dismiss the complaint filed by Mr. Voss citing another New Jersey statute, N.J.S.A. 39:6A-4.5(b) which asserts that any person who is convicted of, or pleads guilty to, operating a motor vehicle while intoxicated, shall have no cause of action for recovery of economic or noneconomic loss sustained as a result of the accident. Tiffany's motion to dismiss was denied by the trial court and again denied on appeal by the Superior Court, Appellate Division.

Here, the New Jersey Supreme Court found that N.J.S.A. 39:61-4.5 (b) was created mainly to reduce automobile insurance premiums and that its scope needed to be restricted to such areas. If N.J.S.A. 39: 6A-4.5(b) was allowed a broad interpretation, sections of New Jersey's Dram Shop Act would have to be repealed, freeing negligent liquor licensees from liability and going against the main directive of the Dram Shop Act: curbing drunk driving.

The holding of this case may require New Jersey liquor license holders to increase their diligence in not serving visibly intoxicated patrons. It will be interesting to see if the New Jersey State Legislature will amend the Dram Shop Act based on the Court's holding.

New Jersey Alcoholic Beverage Control Handbook For Retail Licensees Revised April, 2011

Thu, 28 Apr 2011 12:35:12 -0500

The New Jersey Division of Alcoholic Beverage Control has released a revised Alcoholic Beverage Control Handbook for retail licensses. The revised April 2011 ABC handbook is available at the New Jersey ABC website. The last revision was November 2010.

See this link to download the April 2011 Handbook: http://www.nj.gov/oag/abc/downloads/abchandbook02.pdf

New Jersey Class C Plenary Retail Licensees are required to have a copy of the ABC Handbook for Retail Licensees kept on the licensed premises and available for all employees.

For a list of other documents required to be kept on the licensed premises see this link for the: Self-Inspection Check List for Class C Plenary Retail Licensees.

Procedure For New Liquor License To Be Issued By Municipality Summarized By New Jersey Appellate Division Case

Tue, 29 Mar 2011 16:03:47 -0500

In the recent unpublished Superior Court of New Jersey, Appellate Division case of North Star Saddle Brook Management, LLC v. Township of Saddle Brook and NJ Division of ABC, Docket No. A-3009-09T3, the Court summarized the procedure to be followed for a municipality to issue a new plenary retail consumption liquor license.

The Director of the New Jersey Division of Alcoholic Beverage Control found that the Township of Saddle Brook had no legal obligation to consider North Star's application. The Director stated in his decision that before a new license is issued, the municipality must determine, by ordinance or resolution, that it is in the public interest to do so. Then, the Township is required to afford all interested parties an opportunity to apply for the license or bid upon the license at a public sale. Because the Township had not passed a resolution calling for the issuance of the license, and had not sought applications or bids for the license, the Township had no obligation to consider the application or grant the license.

The applicant, North Star Saddle Brook Management, LLC argued that it was entitled to the issuance of a new license under the hotel/motel exception in N.J.S.A. 33:1-12.20.

N.J.S.A. 33:1-12.14 limits the number of new plenary and seasonal retail consumption licenses that may be issued in a municipality, according to its population, as determined by the "most recent estimates" of the federal census bureau or the "official federal decennial counts." If the governing body of the municipality is authorized to issue the license, and determines to do so, it must adopt a resolution authorizing the issue of the license. N.J.S.A. 33:1-19.1.

The fact that North Star was seeking a license for use in a hotel does not compel a contrary result. Although N.J.S.A. 33:1-12.20(a) provides that "[n]othing in this act" precludes a municipality from issuing a new license to a person who operates a hotel, the "act" referred to in this statute is the legislation initially enacted in 1947 and codified in N.J.S.A. 33:1-12.13 to -12.22, rather than the entire ABC Act.

The hotel/motel exemption does not relieve a municipality of the statutory duty to pass a resolution finding that the issuance of a new license is warranted. The fact that a license could be issued to a hotel or motel does not mean that the application or bid process required by N.J.S.A. 33:1-19.1 and N.J.S.A. 33:1-19.4 would be impractical or unnecessary.

Furthermore, even if the township had been required to consider the application on its merits, the Director correctly determined that the Township had a sufficient basis for refusing to issue the license as another entity was selling alcoholic beverages at North Star's hotel pursuant to a management agreement.

ABC Handbook Updated For New Jersey Class C Plenary Retail Licensees

Fri, 11 Mar 2011 12:27:11 -0500

The New Jersey Division of Alcoholic Beverage Control has released a revised Alcoholic Beverage Control Handbook for retail licensses. The revised November 2010 ABC handbook is available at the New Jersey ABC website.

See this link to download a copy: New Jersey ABC Handbook.

New Jersey Class C Plenary Retail Licensees are required to have a copy of the ABC Handbook for Retail Licensees kept on the licensed premises and available for all employees.

For a list of other documents required to be kept on the licensed premises see this link for the: Self-Inspection Check List for Class C Plenary Retail Licensees.

Penalties For Violations Of New Jersey ABC Laws

Wed, 09 Mar 2011 11:35:42 -0500

One penalty for violating New Jersey ABC laws is an Order of Suspension. An Order of Suspension prohibits the license holder from selling any alcohol on the premises for the duration of the suspension of their license and also prohibits the license holder from serving, delivering or permitting the consumption of alcohol on their premises. The only exceptions to this rule are if the license holder has obtained written permission of the A.B.C. Director to return alcoholic beverages to wholesalers or manufacturers, and there is also an exception provided for the storage of alcoholic beverages on hand at the license holding establishment for the duration of the suspension. The suspended license holder cannot during the period of suspension receive any deliveries of alcoholic beverages at their establishment and any penalties against the person or the license itself must be disclosed on page 6 of the license application.

There is no consumption of alcohol allowed on the premises when the license is suspended and customers are prohibited from bringing their own alcohol to the establishment. Additionally, there is no activity allowed on the premises involving alcohol during suspension which would not otherwise be permitted had the license not been suspended.

There are a variety of punishments short of suspension of the license available to the A.B.C. Minor infractions such as failure to include certain documentation will often result in warning letters or a fine in lieu of prosecution. These are typically issued when the individual violations do not exceed a one day suspension and any cumulative violations do not exceed a five day suspension, according to the rules set forth in N.J.A.C. 13:2-19.1 to N.J.A.C. 13:2-19.16

For serious violations, charges will be filed against the license. When this occurs there is a 30 day period in which the license holder may enter a plea, and they may also gain an additional 30 day extension to do so if there is shown to be good cause. If no plea is entered regulations state that a plea of non-vult will be entered against the license holder. The amount of suspension in terms of days varies, and the penalty imposed is within the sole discretion of the Director, though they can vary between 1 day to 90 days.

The A.B.C. Director may, at his discretion, decide to accept a fine in compromise for all or part of a suspension. However this is based on the consideration of the director and a variety of other factors such as whether this is a repeat offense, whether there existed mitigating or aggravating circumstances and at what stage of the proceedings there was a request.

For serious repetitive violations (usually three or more violations) the license may be revoked. Some violations where the license may be revoked include illegal activity on the licensed premises, providing false information on the license application, leasing out the license, failure to maintain true books, gambling activity, hindering an investigation, and sales to person under the legal age.

Further information regarding the penalty schedule for violations can be found in the State of New Jersey Alcoholic Beverage Control Handbook for Retail Licensees. The Handbook was recently revised in November 2010.

U.S. Court Of Appeals For The Third Circuit Ruling Has Major Implications For New Jersey Wine Sellers

Thu, 27 Jan 2011 11:02:47 -0500

For years local New Jersey wineries have enjoyed advantages over their out of state counter parts when selling wine to locals and when dealing with their competition. That appears to have been changed by a ruling of the United States Court of Appeals for the Third Circuit. In Freeman v. Corzine the Court held in an opinion filed December 17, 2010 that New Jersey Alcoholic Beverage Control laws permitting only in-state wineries to sell directly to retailers and consumers in facially discriminatory in violation of the dormant Commerce Clause. See New Jersey Statute 33:1-10(2a) and (2b). The provision allowing in-state, but not out-of-state, wineries to sell directly to retailers without using a wholesaler is discriminatory.

The Court declared another New Jersey ABC law in violation of the dormant Commerce Clause which prohibited the importation for personal use of more than a gallon of out of state wine unless the importing individual secured a special permit from the New Jersey ABC. See New Jersey Statute 33:1-2(a). The reciprocity provision of New Jersey Statute 33:1-2(a) is also facially discriminatory against interstate commerce. The reciprocity provision of the law provides: "no person shall transport into this State or receive from without this State into this State, alcoholic beverages where the alcoholic beverages are transported or received from a state which prohibits the transportation into that state of alcoholic beverages purchased or otherwise obtained in the State of New Jersey." New Jersey Statute 33:1-2(a).

"The reciprocity requirement prevents certain wine, in this case, wine from specified jurisdictions- from entering the state outside the strictures of the three-tier system, while local winemakers are free to sell as much wine as they can directly to New Jersey residents." Freeman v. Corzine.

The Court also held that a New Jersey ban on the direct shipping of wine was constitutional. The direct shipping ban was where the plaintiffs lost, because they did not use any evidence (statistical or otherwise) to support their assertions. The direct shipping ban was even handed in that it forced all wine sellers, in-state and out-of-state, to move their goods through one channel.

The Court's holding should have major implications for New Jersey wine sellers and customers throughout New Jersey, and may end up allowing New Jersey consumers a more diverse array of wines to choose from. The case was remanded to the District Court for a determination of the proper remedy.

The Importance Of Proper Bookkeeping At New Jersey Retail Liquor License Establishments

Mon, 20 Dec 2010 10:34:05 -0500

It is within the power of the New Jersey Alcoholic Beverage Control to enter establishments selling alcoholic beverages through their retail liquor licenses and request to see their accounting and record keeping books.

In the busy day to day activities of running an establishment many New Jersey liquor license owners may not always remember to update their records and this, which may seem like a harmless error, could harm their business in both the short and long term. N.J.A.C. 13:2-29.4 deals with the administration and rules regarding record keeping on an alcoholic beverage selling premises and states that unless specificed by the Director records are to be stored on the premises and are not to be more than three months old at the time of inspection.

All records on file at the establishment must be accurate and up to date on inspection, and it is recommended that if the license holder can afford a full time accountant for their business that they hire one. Having a full time accountant can ease the burden of making sure their business and financial records are updated and that their establishment will pass any inspection by the ABC.

New Jersey Administrative Code 13:2-29 deals with the rules and regulations for records and their storage at ABC licensed establishments throughout New Jersey, with N.J.A.C. 13:2-29.4 clarifying the rules regarding the storage and availability of records for inspection.

If you or someone you know has a question regarding record keeping related to their New Jersey ABC liquor license, it is recommended that they speak with an experienced New Jersey ABC lawyer who will be able to assist with any questions and discuss all aspects of a particular situation.

New Jersey Retail Liquor Licensees Face Penalties for Receiving Alcohol from an Improper Source

Thu, 16 Dec 2010 10:03:17 -0500

Though it may be tempting for business owners of retail liquor licenses throughout New Jersey to purchase the alcohol they sell at their own establishments from any number of sources, New Jersey ABC regulations largely prohibit business owners from doing so.

According to New Jersey Administrative Code 13:2-23.12(a), a retail licensee shall purchase alcoholic beverages only from a manufacturer or wholesaler. Otherwise a special permit must first be obtained.

Generally the sale of alcoholic beverages from one retail to another is prohibited by N.J.A.C 13:2-23.12(b), unless there is a passage of title from transferor to transferee, in which case once again a special permit would be needed from the ABC.

In order for retail licensees throughout the State of New Jersey to avoid unintended consequences and in order to maintain an unblemished record on their license, it is important for them to avoid buying their alcoholic beverages from other retail licensees. What may start out as a short term money saving decision could quickly turn into a major loss of profits as licensees face the suspension of their license.

if you have a question regarding the sale of alcoholic beverages as a New Jersey retail licensee or related liquor license issues, it is recommended you consult with an experienced New Jersey ABC/liquor license attorney.