merklin.jpg

Beach Haus brewer John Merklin shows off a couple of his beers at an event last week in a local bar; he hopes to have his new facility in Belmar open by March.

(Paul Mulshine)

Did you hear the one about the guy who killed his parents and then begged the judge for mercy because he was an orphan?

That's an old joke. But it describes perfectly the way the liquor lobby has manipulated the state Legislature over the years. Back in 1947, the liquor interests managed to buy enough legislators to get a law passed capping the number of liquor licenses.

That of course meant that the licenses were turned into exclusive franchises and the owners could sell them for absurd amounts of money. Licenses that cost just a few hundred bucks in other states can cost half a million in New Jersey.

That drives up prices while decreasing service for the consumer. Yet every time some legislator has tried to reform the system, the liquor lobbyists have lined the halls of the Statehouse to beg mercy. The reason? Because their licenses cost so much money.

Thanks to that bit of circular reasoning, Jersey beer drinkers have been deprived of the benefits of the craft-beer revolution. In other states a brewpub license is available to anyone who brews beer, but here the brewers have to first pay ransom to the liquor lobby before they can connect to the consumer.

That's starting to change thanks to a bill that somehow got past the lobby back in 2012. The bill permits microbrewery owners to set up tasting rooms where they can sell their beer directly to the consumer to drink or to take home, usually in 64-ounce bottles called "growlers."

The bill's provisions are vastly more restrictive than in other states. There, the brewer can run a regular bar. Here the brewers can sell beer only in conjunction with a brewery tour. They're also banned from selling food.

That didn't keep the usual parade of parasites from showing up to testify in opposition. For once the legislators ignored them, and the bill passed with bipartisan support. We're now seeing the result. Microbreweries are springing up all over the state, mostly in older downtown areas that could use a bit of economic growth.

"If you look around at the small breweries that are emerging, many are popping up in towns that were underserved and need a revitalization of their main street," said Rich Palmay. He's the co-owner of the Village Idiot in Mount Holly, an older town that is the county seat of Burlington County.

Customers can take their brewery tour via a video if they desire and then settle down and have a few pints. The Idiot attracts a lively crowd who patronize nearby businesses, Palmay said.

"Craft beer fans are such that they will travel to try different beer and they're not afraid to spend money," "he said. "Breweries are now being looked up to as businesses that can provide economic stimulus."

Perhaps the most ambitious such project is in Belmar. There the producers of Beach Haus beer are turning a former bakery into an 18,000-square-foot complex that will include not just their brewery but also a restaurant or two and an art studio called "Paint and Sip."

That was a new one on me, so I sat down over a beer with Beach Haus co-founder John Merklin and asked him to explain it. As he sipped on a Winter Rental beer, Merklin told me this is a concept that has been around for a while but mostly in big cities.

"You can bring a bottle of wine or maybe a growler of Beach Haus beer and you pay a certain fee and you learn how to paint," he said a. "It loosens people up to try an art form like that."

It would certainly loosen me up, but I'd hate to see the painting that would result. Still it certainly sounds like the kind of thing that would attract an upscale crowd.

That was the point of the bill, said Senate Minority Leader Tom Kean Jr.

"This is the No. 1 economic-development bill I ever sponsored," said the Union County Republican. "It opened up the doors for the innovators and entrepreneurs excited by a product delivering great value."

The Beach Haus Brewery under construction: A major addition to Belmar's downtown made possible by the loosening of the laws regarding microbreweries.

Economic development? That would create competition. My sources say the liquor lobbyists are mounting an effort to get the Alcoholic Beverage Commission to write regulations that would hamstring the breweries.

But when I got Belmar Mayor Matt Doherty on the phone, he told me that the Christie administration and ABC director Michael Halfacre realize the value of this sort of project in bringing year-round business to a town like Belmar.

"In the summer, we're mobbed," said Doherty. "But in the off-season, businesses need help with foot traffic. We're excited about it and the other merchants are excited about it."

Not as excited as the liquor lobby, I imagine. The monopolists must be frantic at the thought that after almost 70 years without a free market they will finally find out what competition looks like.

This joke is getting really old. Let's hope the punch line is a death sentence.

ADD: Back in 2012 I did a column on the amazing way in which the liquor lobbyists argue for restrictions on the market even tighter than can be found in some communist countries I've visited. Here's an excerpt in which I imagined having a trap door under the seat of anyone testifying on the bill. In a free country, I argued, we'd spring that trap on anyone who proposed eliminating competition. That person would end up in a vat of beer.

I wanted to suggest that anyone who believes in that sort of thing should move to Cuba. But check the photo below of a beer-vending machine that a friend sent me after a trip to Havana.

Yes, it's that bad. New Jersey is less free than Cuba, boys and girls.

Here goes:

One by one, the lobbyists got up and made the usual pleas for the legislators to squelch competition. Typical was Paul Santelle, president of the New Jersey Liquor Store Alliance. Santelle said he didn't mind the microbrewers getting a few breaks, but "What we don't want to do is become competitors with one another." Sproing! That guy would have been soaked in suds if a beer drinker had control of that button. So would Larry Blatterfein, of the New Jersey Restaurant Association. Blatterfein warned that any effort to give beer-drinkers more options "only serves to cause further instability in the market." Into the beer bath, Blatterfein! Free markets are supposed to be unstable. Also due for a dunking would have been the guy who warned his fellow co-conspirators: "Your liquor license value is under attack." Under attack? That value should be zero. Into the drink! In other states, a liquor license is like a driver's license. If you meet the standards, you get the license. Such a state is Delaware, where the Iron Hill microbrewery has three brewpubs. Iron Hill was founded by Jersey guys, but they had to flee the state to find free enterprise.



Founder Mark Edelson testified that Pennsylvania, where Iron Hill has six pubs, produces 50 times as much microbrew as Jersey. Edelson told the panel Iron Hill has just one brewpub in Jersey and it can't expand here because of our anti-business atmosphere. Another brewer, Gene Muller of Cherry Hill-based Flying Fish, said "We're forced to compete with one hand behind our back here." Indeed they are, and this bill wouldn't do much to change that, says Dave Hoffman. Hoffman is the head of Climax Brewery in Roselle Park, which won the 64-beer "Malt Madness" competition the Star-Ledger held a few years ago. Hoffman sells his beer only through liquor stores but he'd love to be able to open a small restaurant and pub in his brewery. "I want a bar so anyone can come in," said Hoffman. If he had that option, he said, "I would immediately fire up my slow cooker." He would then dish out some of the excellent barbecue I've had when I've hung out in the brewery's back yard with him. (UPDATE: Dave's now open for tastings Friday evenings.)



During that hearing, however, a lobbyist boasted of success in keeping the restaurants free from that form of competition. By the time the bill gets to the governor's desk, if it ever does, expect it to be watered down worse than light beer. But perhaps you don't care about beer. Keep in mind that the same process occurs with everything regulated in Trenton, from insurance to education. Our legislators take it as a given that their role is to keep out competition no matter what the effect on the public.

Other hearings have been the same. These people just assume the politicians support them in their goal of eliminating competition.

Till now, they've been correct in that assumption. But fortunately my dire prediction above about the bill getting watered down didn't come true.

However it still makes no sense to put any restrictions on breweries that aren't imposed on bars. In other states, brewers can set up pubs and sell beer and food openly to the public.

In fact, it makes no sense whatsoever to insist that the sale of food be banned. The exact opposite should be the case. That sale of food should be required and even encouraged, for the obvious reason that drinking on an empty stomach is not a good idea.

So contact your local legislator - before the liquor lobby does.

ALSO: It looks like Scott Walker is in bed with the big-beer lobby as well in trying to crush the craft-beer industry. Thanks to reader Tom Ryugo for pointing this out.