NJRHA Shares Insight Into NJ Liquor License System

TRENTON, NJ – The New Jersey Restaurant and Hospitality Association (NJRHA) President Dana Lancellotti issued the following statement, sharing insight into the New Jersey Liquor License system.

“The New Jersey Restaurant and Hospitality Association is proud to represent all types of food and beverage establishments.

We are glad that efforts are once again in play to explore ways to change this system.  With that, we as an Association want to promote awareness and careful consideration of the financial consequences at stake for those in our industry who have invested in NJ liquor licenses.

While we have welcomed and hosted discussions exploring changes to the liquor license system, we have emphasized that there are tremendous financial investments at stake for our liquor license holders. Under the laws that have been in place, many licensees paid an exorbitant cost, purchasing the license at market value as required. Adding more new licenses to the market will immediately diminish the value of those licenses and devastate this asset. Small businesses who followed the rules and paid the cost required of them, will be faced with huge financial loss.

The limit to the number of licenses is what has driven the costs so high. Some as much as a million dollars. These rules were not created by licensees… this is the NJ liquor license law as it exists. The license-holders did not create the limited availability, they followed a dream to own a restaurant and bar and they strived to afford the investment. They then were required to follow the rules and guidelines of that license in order to keep it. They also pay a fee annually to maintain the license. If the State changes the value of this asset, these licensees will be faced with tremendous losses financially. Much like the taxi owners faced when the alternative transportation companies entered the landscape. There needs to be a pathway that will avoid a devastating blow to these investors.

For one, rather than adding entirely new licenses to the market it would make sense to focus on ways to get the more than 1,000 inactive licenses back into the market. These “pocket” licenses could be publicly bid so that anyone can compete. The transfer of the pocket license between municipalities should also be considered.

We know this is a complex issue with many possible solutions on the table. We look forward to continuing this conversation to ensure any changes to the laws are fair for all involved.”

To learn more about the NJRHA, visit www.njrha.org

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