In New Jersey, a retail liquor license is required for the purpose of manufacturing and selling alcohol. General licensing requirements and the enforcement of alcoholic beverage laws are handled by the State’s Division of Alcoholic Beverage Control (ABC). The Division of ABC classifies liquor licenses into three main groups: manufacturing, wholesale and retail. Retail, or Class C, licenses are issued to businesses such as bars, restaurants and liquor stores for the purpose of selling alcoholic beverages. Class C licenses include Hotel/Motel Licenses, Plenary Retail Consumption Licenses, and Seasonal Retail Consumption Licenses. Each license has its own set of privileges and limitations, such as the right to sell alcoholic beverages in open containers, and the right to sell alcohol in a facility for 1,000 or more people. Furthermore, the Limited Retail Distribution License, which is required for the selling of alcoholic beverages in grocery stores, meat markets and delis, is no longer issued, although existing ones may be renewed or transferred.
Obtaining a retail liquor license in New Jersey is a very complicated process, especially because of the State’s complex ABC laws. Although the Division of ABC has general authority over alcoholic beverage laws, each municipality also has its own Alcoholic Beverage Control Board to oversee the sale of alcohol. This has resulted in certain municipalities allowing alcohol to be sold only from Monday to Saturday, while others chose to be “dry towns”, which forbid the sale of alcohol within its own borders. In conjunction with local ABC laws, the Division of ABC has its own set of rules to govern the issuance of retail liquor licenses. For example, the State Division’s Licensing Bureau limits corporations to only two retail licenses at any time. This policy makes it impractical for chain grocery and convenience stores to sell beer and wine, since they could only do so in two stores for all of New Jersey.
Another factor that complicates the process of obtaining a retail liquor license is New Jersey’s quota on the number of licenses allowed per municipality. The State allows each municipality one consumption license for every 3,000 residents and one distribution license for every 7,500 residents. This means that no new licenses can be issued for a municipality unless it increases in population by the above- mentioned figures. Therefore, most new retail licenses in New Jersey are offered through public auctions, where bids can go as high as several hundred thousand dollars. In fact, in 2006, a retail liquor license was sold for a staggering sum of $1.5 million at an auction in Cherry Hill, NJ.
Due to these restrictions, businesses typically attempt to purchase existing licenses instead of applying for new ones. A business owner can find out about liquor licenses available for sale by contacting the municipality’s Alcohol Beverage Control Board. A private meeting can be arranged between the two parties to negotiate a sale, after which they would file a transfer application with the Board. The application can be obtained by calling the Division of ABC’s Licensing Bureau at (609) 984-1954, or download from the Division’s website. The application requires detailed information about the applicant and the company’s officers, directors and shareholders, if applicable. In addition to the 12 page application, there are many other requirements, such as a finger print report, sketches of the proposed license area, and submitting to a background check.
With so many details to consider, it’s not uncommon for applicants to seek assistance from an experienced ABC lawyer. A lawyer is especially helpful in cases where the applicant has to undergo a public hearing before the license can be approved or renewed. Even if the applicant has fulfilled all the requirements, the slightest violation of any ABC laws will cause a municipality to deny or revoke a liquor license. It is highly recommended that applicants consult a lawyer to ensure that they are in full compliance with the ABC laws of the municipality in which they are seeking a license.
Helpful information is also available from the New Jersey Attorney General’s website. The site’s Alcoholic Beverage Control section answers many questions about retail liquor licenses, such as the age requirement for obtaining a liquor license, and how many liquor stores and licensed restaurants are allowed per municipality.
The site also clarifies which issues are under the jurisdiction of the municipality, as opposed to the state. For example, the Division of ABC prohibits the sale of distilled spirits before 9:00 AM, and after 10:00 PM during any day of the week. However, each municipal ABC Board can choose to place further limits on these hours, such as prohibiting the sale of liquor on Sundays. There are also exceptions for “cities of the first class”, such as Jersey City and Newark, which are not restricted by either the State or municipality’s hours of sale laws.
Neither the Division of ABC, nor the municipal ABC Board has jurisdiction over Atlantic City casinos or federal enclaves, such as military bases. Liquor laws for Atlantic City casinos are the responsibility of the New Jersey Division of Gaming Enforcement and the New Jersey Casino Control Commission. As for federal enclaves, the U.S. Constitution allows for the federal government to exercise authority in places that it has purchased for the purpose of “needful buildings”, such as forts, arsenals and dockyards. While certain state laws do apply in federal enclaves, the courts have ruled that federal lands and military bases can remain exempt from state and local ABC laws.
The difficulties in obtaining a retail liquor license has resulted in many New Jersey restaurants instituting a BYOB (“bring your own bottle”) policy. This practice allows patrons to bring their own beer or wine to a restaurant within the hours in which alcohol sales are allowed in their municipality. Patrons may only bring wine or malt beverages, meaning no hard liquor or mixed drinks. The restaurants cannot charge patrons a corkage fee for bringing their own beer and wine, nor can they advertise that patrons can bring beer and wine to the restaurant.
If you need assistance with applying for a New Jersey retail liquor license, please call the knowledgeable ABC lawyers of Villani & DeLuca. Jeffrey A. Warsh, Esq., former staff attorney for the NJ Division of Alcoholic Beverage Control, will be happy to answer your questions during your consultation. Mr. Warsh is a current member of the Alcoholic Beverage Control Advisory Counsel, and has over 20 years of experience representing clients in the public and private sector. Whether you seek assistance with a liquor license application, or need legal advice about a public hearing to approve or renew your license, our firm’s ABC law attorneys have the experience to guide you to a successful resolution. Call (732) 965-3350 today to speak with an ABC lawyer in NJ.