New Jersey Liquor Laws

The liquor laws of New Jersey have been called the most complex of all alcohol regulations in the United States. They’ve been called “outdated,” “past their shelf life,” and among the most restrictive in the country. But those laws have been on the books for a long time, and some influential voices in New Jersey are very keen to keep them that way.

This page will provide an analysis of liquor laws and regulations in New Jersey, including their history and current attempts to modernize liquor laws.

Liquor Laws & Regulations in New Jersey

There are numerous laws and regulations regarding the sale and distribution of alcohol in the state. New Jersey liquor laws are considered some of the most restrictive in the United States, varying from one town to another, from county to county, and their complexity can make them difficult to navigate.

What Is the Home Rule

The problems begin with New Jersey’s policy of home rule, a system whereby every town, city, municipality, and borough has its own infrastructure: its own police and fire department, public utilities, planning director, school system, and liquor laws. This applies to even the smallest of settlements, regardless of how much of a financial burden such services place on the state government.

In addition to civil infrastructure, New Jersey’s home rule system also permits individual communities a large degree of authority in creating and enforcing their own policies when it comes to the sale and consumption of alcohol within their borders. The population of a municipality determines the number of retail licenses made available, which may be further regulated by the community’s governing body.

Dry Towns and Legal Limits in New Jersey

Because of New Jersey’s home rule system, the regulations regarding how much alcohol can be produced and consumed can be very different from town to town, even within the same county. Some towns, for example, are dry; alcoholic beverages cannot be sold, but restaurants will allow customers to bring their own booze, and some dry towns even have breweries and wineries. Other towns are completely dry. Even for the areas that do permit alcohol sales, the licenses to do so are expensive and difficult to obtain.

Why Does New Jersey Have Dry Communities?

New Jersey’s strong history with religious groups like Quakers and Puritans goes some way in explaining the state’s reluctance to fully embrace alcohol. Certain laws were written shortly after the end of Prohibition, where even as the rest of the country celebrated the passing of the Eighteenth Amendment, there were still concerns over the social and health risks of alcohol. Even as decades and generations passed, some towns never updated their rules, and the sale and distribution of alcohol in local businesses remains a quagmire of bureaucracy that persists in the early 21st century.¹

New Jersey Alcohol Laws and Underage Drinking

New Jersey state law further muddies the waters by allowing individual cities and towns to define underage drinking laws the way they see fit, setting up potential conflicts of jurisdiction with other local governments under the same umbrella — including for people across the river in New York. The age of consent may vary by county, making it difficult to know if someone who is underage and in possession of an open container of alcohol is actually breaking the law.

New Jersey Liquor Laws and Retail Licensing

In New Jersey, corporations face further restrictions and are limited to just two retail distribution licenses. This creates a stiflingly impractical situation for chain stores, like Costco, to sell alcohol (and alcoholic beverages). Additional municipal legislation, such as New Jersey beer laws, restricts supermarket and convenience stores from selling beer and wine.

Corrupt, Inefficient, Costly, and Time-Wasting

Writing an opinion piece in NJ.com, Louis D. Greenwald, the Assembly Majority Leader of the New Jersey General Assembly, called for a modernization of his state’s liquor laws, pointing out that a 1962 law imposes an unnecessarily strict cap on supermarket liquor licensing. This cap has effectively prohibited an overwhelming number of supermarkets across the state from being licensed and selling alcoholic beverages.

Such laws, says Greenwald, were written in the days of independently owned “mom and pop” corner stores, to protect establishments from price fixing and organized crime. But even as the landscape has changed, with supermarket chains rising and mobsters falling, liquor laws failed to reflect the cultural and economic shift.

Greenwald finishes his NJ.com column by talking about his proposed legislation to update New Jersey’s liquor laws, with an eye on creating jobs and stimulating the economy. The point, he says, is that his state’s rules on how alcohol should be distributed are “vintage,” written for a bygone era. By modernizing how New Jersey regulates its share of an industry that was nationally worth over $400 billion in 2010, Greenwald says the Garden State will become like the rest of the country in taking the seemingly basic step of offering wine, spirits, and beer in supermarkets.²

Greenwald calls for gradually allowing for the two-license cap on individuals and corporations to be lifted, pointing to a 2011 study published by Monmouth University that showed New Jersey residents who actively purchase alcohol would like to enjoy the convenience of buying alcohol in supermarkets. Such a move, says Greenwald, would benefit both the business and the consumer.³

Greenwald’s voice is not the only one speaking up against what are also known as retail consumption laws in New Jersey. In July 2014, the principal of a development and consulting firm told an audience of real estate officials that the current system of New Jersey’s laws are corrupt, inefficient, costly, and time-wasting.⁴

Liquor License Issues in NJ

New Jersey law allows local government to issue one liquor licenses based on population:

• 1 restaurant liquor license for every 3,000 residents.
• 1 retail store liquor license for every 7,500 residents.

The point is picked up by NorthJersey.com. In “Battling N.J. Liquor Laws,” the site explains that New Jersey law allows local government to issue a single restaurant liquor license for every 3,000 residents. Retail stores are granted a license for every 7,500 residents. But as an example of New Jersey’s complex and restrictive liquor licensing laws, consider Teterboro, a borough in Bergen County. The borough is home to a 55-acre shopping center that cannot serve any alcohol, because Teterboro has only 67 residents.⁵

It took a 2013 bill that gave the state “special authority” to create five additional liquor laws, three for restaurants and two for retail stores. In October, a Costco location opened at the shopping center, but was unable to use any of those five liquor laws. Since Costco is entitled to only two retail liquor licenses (which it uses in the municipalities of Wayne and Edison), the chain cannot claim another liquor license to legally sell alcohol in Teterboro.

This has led to a situation where there is a liquor store attached to the Costco in the Teterboro shopping center, but the liquor retailer is not a part of the Costco corporation, and it cannot sell Costco’s signature brand of bourbon, tequila, whiskey, or chardonnay.

The Price for a Liquor License

The current system of laws in New Jersey not only prevents businesses from receiving new licenses, but also allows individuals and corporations who hold licenses to hang on to them for years, even if the licenses are not being used. This has the effect of unfairly raising prices in high-demand areas, with some licenses reaching prices between $50,000 and $2 million (the Cheesecake Factory restaurant in Short Hills, New Jersey, paid $2.3 million), as holders steadfastly oppose any measure that might erode their monopoly.

The result is that there is no significant desire to change the status quo, even where the status quo has stopped making sense. Nonetheless, entrenched business owners hold all the right cards, and the politicians and lawmakers who benefit from the arrangement are happy to turn a blind eye or kick the can down the road. New Jersey’s rigid and archaic liquor license laws remain just as they are.

Retailers for Responsible Liquor Licensing

NorthJersey.com points out that New Jersey’s governance of how alcohol is sold and distributed cannot continue in the modern era of decentralized and remote industry, especially when the relevant laws were written for a different generation in response to a different problem (that of bootlegging in the Prohibition era).

The proposal put forward by Louis Greenwald, says NorthJersey.com, would allow supermarkets that are known for selling food to receive up to 10 liquor licenses over a period of time. This plan would only extend to supermarkets that carry groceries; warehouse stores like Costco, and even big-box stores like Wal-Mart and Target (both of which also sell groceries) are exempt from this provision. Not only would this protect local businesses from corporate chains buying up every available liquor license, it would also do away with locally owned stores from having to resort to putting their businesses in the names of different family members, which they have to do to circumvent the two-license limit.

So outdated and restrictive are New Jersey’s liquor laws that a group of supermarket chains have come together, calling themselves Retailers for Responsible Liquor Licensing, to express their support for Louis Greenwald’s plan.

Opposition to Modernizing the Laws

However, not all voices have been in favor of modernizing alcohol regulation in New Jersey. Owners of liquor stores and wholesale liquor distributors are worried that granting more liquor licenses, or expanding the terms of current liquor licenses, will squeeze them out of business. The president of the New Jersey Liquor Store Alliance, who also owns the Super Wine Warehouse in Paterson, NJ, told NorthJersey.com that extending liquor licenses to mass merchants that have their head offices outside the state will be too much competition for New Jersey-based stores.

The current liquor licensing laws have been instrumental in keeping corporate chains out of the Garden State and encouraging smaller businesses to operate. Changing NJ alcohol laws to increase the scope of licenses could cause big out-of-state competition to saturate New Jersey’s market.

The owner of a chain that has four locations in New Jersey insisted that changing the licensing rules has to be for reasons more logical than there simply being a strong lobby to reform the laws, especially if businesses that have played by the rules suddenly find themselves on the losing side of the change. He argues that if supermarkets are allowed up to 10 licenses, independent wine and liquor stores should also receive the same benefit.

‘Accompanying Nuisances’

New Jersey Monthly Magazine provides another reason for the local resistance to loosening up the state’s retail consumption laws — which the publication says have not been updated since 1948 — smaller towns appreciate that a reduced limit on liquor licenses clamps down on the number of bars that operate and the “accompanying nuisances.”⁸ The sentiment may be a holdover from the days when the laws were written, but now the stakes are higher.

For example, two bars in the Jersey Shore area – home to the infamous reality TV show of the same name, which was slammed by observers for promoting copious alcohol consumption as a lifestyle and disavowed by the borough where the show was filmed because of the “bad behavior” carried out while cameras were running – were at risk of having their liquor licenses suspended for serving underage customers.^7,8

A Lack of Competition and Higher Prices

But the bigger frustration, says NJBIZ, is that the resistance to reforming New Jersey’s retail consumption laws deprives the state of competition. License holders are allowed to sit on their permits furthers a state of inequality that paralyzes the entire industry and prevents New Jersey from developing local economic opportunities.

An editorial in NJBIZ “pleads for some sanity” in reforming New Jersey’s liquor licensing laws, which are “hopelessly out of date.” The paper specifically mentions the biased and unfair way the state government issues permits. It is viewed as a system that is easily gamed by shrewd (and rich) business owners to create a monopoly that benefits them alone, not the liquor industry in New Jersey and not New Jersey residents who would like a greater variety of options and more reasonable pricing in their alcohol beverage consumption.⁹

The Dark Ages

Meanwhile, the fight goes on with no sign of resolution on the horizon. The executive director of Retailers for Responsible Liquor Licensing told a New Jersey radio station in December 2015 that the goal of his coalition was to “bring New Jersey out of the Dark Ages,” with regards the Garden State’s retail consumption laws.¹⁰

What would be in it for New Jersey? The word competition is used a lot, but in 2011, the Food Marketing Institute carried out a study that went into some detail about what the state stood to gain if it relaxed its grip on liquor licenses.

• The state could gain $12.6 million in wages from the creation of over 275 full time jobs that would arise from supermarkets being allowed to sell beer and liquor.
• New Jersey coffers stand to collect $6.7 million in sales and excise tax revenues, and $3.6 million from business and employment taxes, without having to raise tax rates.
• The demand for licenses could give municipalities as much as $364,600 in license transfer fees, a figure that might increase if retailers purchase expired licenses directly from local governments and not the owners of the expired licenses.¹¹

Alcohol Addiction Treatment in Lafayette, NJ

Whether New Jersey’s liquor laws will be changed or not, alcohol addiction continues to affect millions of lives across the United States and in New Jersey. If you or someone you love is struggling with alcohol addiction, there is effective evidence-based treatment that can help get you on the road to recovery.

To learn more about different levels of addiction treatment or to find out more information about our rehab in Lafayette, NJ, contact our helpful admissions navigators at . They can answer your questions about the rehab admissions process, go over the different rehab payment options — including using insurance for rehab.