There have been cries for years to reform New Jersey’s old and complex restaurant liquor licence requirements.
There are now indications that change may finally be on the horizon.
During his Tuesday State of the State speech, New Jersey Governor Phil Murphy called for an overhaul of the present system and an increase in the number of liquor licences for eateries around the state.
The liquor licencing system is based on outdated restrictions developed immediately after Prohibition, which, according to Murphy, “deliberately generated market scarcity” and drove the cost of obtaining a licence so high, often exceeding $1 million, that small and independent restaurateurs cannot obtain one.
More Liquor Licences
“Increasing the amount of accessible liquor licences would not only assist maintain the health of our favourite local restaurants,” stated Murphy. It will also assist maintain the health of our economy.
According to the existing law, a local authority is permitted to provide one liquor licence for every 3,000 citizens. Because their old permits were grandfathered in a century ago, some communities have more.
“I propose that, over the next few years, we gradually reduce this condition and increase the number of available licences until the restriction is completely lifted and the market may operate freely,” Murphy said.
As this strategy proceeds forward, he emphasised that restaurants that have already made substantial up-front financial investments to obtain their present licences must be reimbursed.”I propose a tailored tax credit to assist them as the number of available licences increases,” he said.
Reaction from the industry
This is a tough problem, according to Dana Lancellotti, president of the New Jersey Restaurant and Hospitality Association.
Lancellotti stated that while reform is necessary, the key to its success is to not move too hastily, as current liquor licence holders have paid enormous sums to obtain them.
We want to ensure that the value of their licence is not diminished, as it may be if this is not done properly.
She added that the Association is pleased that the governor recognises the significant investment made by liquor licence holders, but that “adding more licences to the marketplace will have a negative impact on these small businesses that have contributed so much to their communities over the years.”
The return of the over one thousand unused but existent licences should be the top priority of any policy discussion.
Murphy Said Plan Would Stimulate Economy
The governor stated that reforming the system won’t be simple, but it will be worthwhile since it will “produce up to $10 billion in new economic activity and $1 billion in additional state and municipal income over the next decade”
Murphy also urged legislators to assist him “in lifting outmoded licencing and operating limitations on our artisan breweries, distilleries, and wineries, which are experiencing a veritable renaissance.”