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General Category => Going Pro => Topic started by: tonyp on July 16, 2013, 08:48:09 pm

Title: Going Pro Cheap - NJ Farm Brewery Licensing and Fees
Post by: tonyp on July 16, 2013, 08:48:09 pm
Awhile ago NJ passed a bill allowing Farm Breweries, here's the text of the bill:

Farm brewery license. 1d.
The holder of this license shall be entitled, subject to rules and regulations, to brew any malt alcoholic beverages in a quantity to be expressed in the license not in excess of 2,000 barrels of 31 fluid gallons per year and to maintain a warehouse and to sell products to consumers for consumption off the licensed premises and to offer samples for sampling purposes only.  The license shall be issued only when the brewery at which such malt alcoholic beverages are brewed is located and constructed upon a tract of land exclusively under the control of the licensee, provided the licensee is actively engaged in farming on or adjacent to the brewery premises and is growing and cultivating hops or another product which is used in the production of the malt alcoholic beverages.  The fee for this license shall be graduated as follows: to manufacture between 1,200 and 2,000 barrels per year, $300; to manufacture between 100 and 1,l99 barrels per year, $200; to manufacture fewer than 100 barrels per year, $100.  For purposes of this subsection, "sampling" means the selling at a nominal charge or the gratuitous offering of an open container not exceeding one and one-half ounces of a malt alcoholic beverage.  No individual or entity shall hold more than one farm brewery license.


So basically for the cost of a shed, a home-brew system, $100 license and planting some hops you're in business and can sell up to 1,000 bbl a year. This might be a good way to get into the business and see if you actually like doing it.

Worst case scenario is that it doesn't work and you're out $100. Either way you are left with a brew-shed and a small plot of hops.

There have been other bills passed with regards to being able to sell to the public (making it legal to have a taproom) but I'm not sure that applies to Farm Brewery Licenses.

In any case, you can still sell 1.5oz samples on premises. At $5/pint, a 1.5oz sampler would run about 62¢. Bring that up to $1/1.5oz sampler and you're now making $8/pint at the tap (obviously the cost/profit would need to calc'd correctly depending on material costs and other factors). Selling a full keg of 1.5 oz. samplers at $1 from the tap would make approx. $425 (5gal * 640oz / 1.5oz = 426.666). Drop the price to 75¢ per 1.5oz sampler and you're still making $320 per 5gal keg at the tap, and likewise at 62¢, $264.

I live on almost 4 acres of land here that is zoned rural and I'm thinking of giving it a go, but I just wanted to start the conversation and see what everyone else thinks about this given the low startup costs.

Tony
Title: Re: Going Pro Cheap - NJ Farm Brewery Licensing and Fees
Post by: Jimmy K on July 16, 2013, 09:14:26 pm
I wonder if growing fruit would also count if you use it in a fruit beer.

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Title: Re: Going Pro Cheap - NJ Farm Brewery Licensing and Fees
Post by: In The Sand on July 16, 2013, 09:14:33 pm
Much cheaper than Florida where a malt manufacturer's license is $3k annually. If you brew less than 500 bbls and don't sell to distributors you can pay the smaller license fee of $750.
Title: Re: Going Pro Cheap - NJ Farm Brewery Licensing and Fees
Post by: morticaixavier on July 16, 2013, 09:15:58 pm
Massachusetts is doing something similar. you still have to deal with the feds and pay a bond but that goes towards your taxes due them anyway. I imagine your locality will have some ideas around what can and can't be a) a brewery and b) a tasting room not to mention local ordinances regarding intent to serve alcohol. but yeah it's pretty cool!
Title: Re: Going Pro Cheap - NJ Farm Brewery Licensing and Fees
Post by: denny on July 16, 2013, 09:27:26 pm
That's totally cool!  With that option, I might have a retirement "biz"!
Title: Re: Going Pro Cheap - NJ Farm Brewery Licensing and Fees
Post by: narvin on July 16, 2013, 09:36:08 pm
It looks like you can't have a tap room (for selling pints, at least) without getting another liquor license.  Can you self distribute in NJ?  If not, then you're basically selling bottles or growlers to go unless you can convince a distributor to take on a nano brewery (and are willing to accept even less money for your labor of love  :) )

Local zoning will still apply, so I don't know if someone on 1/4 acre in a suburb with a HOA will be able to get licensed.  If you're not already zoned for commercial I imagine you're going to have to live in a permissive locality or at least get local community support.  If you live in the country it's probably easier, but that cuts down the foot traffic a bit.

Title: Re: Going Pro Cheap - NJ Farm Brewery Licensing and Fees
Post by: tonyp on July 16, 2013, 10:20:17 pm
It looks like you can't have a tap room (for selling pints, at least) without getting another liquor license.  Can you self distribute in NJ?  If not, then you're basically selling bottles or growlers to go unless you can convince a distributor to take on a nano brewery (and are willing to accept even less money for your labor of love  :) )

Local zoning will still apply, so I don't know if someone on 1/4 acre in a suburb with a HOA will be able to get licensed.  If you're not already zoned for commercial I imagine you're going to have to live in a permissive locality or at least get local community support.  If you live in the country it's probably easier, but that cuts down the foot traffic a bit.


Yes you can self-distribute in NJ and according to the Farm Brewery License you can sell 1.5oz samples on premises but it doesn't specify any amounts, so...

The new laws for Plenary and Limited Breweries allows them to sell direct to consumers for on or off premises consumption.
Title: Re: Going Pro Cheap - NJ Farm Brewery Licensing and Fees
Post by: micsager on July 16, 2013, 10:38:31 pm
In my state the license is $100, and $100 for the Brewer's bond to the feds, and that's it.  We brew commercially as a hobby after work and on the weekends.  Amazing that Florida charges $3k. 

Title: Re: Going Pro Cheap - NJ Farm Brewery Licensing and Fees
Post by: In The Sand on July 16, 2013, 11:40:44 pm
In my state the license is $100, and $100 for the Brewer's bond to the feds, and that's it.  We brew commercially as a hobby after work and on the weekends.  Amazing that Florida charges $3k.

Plus brewers bond and $280 consumption license for taproom service. And we wonder why there aren't many microbreweries in the south.
Title: Re: Going Pro Cheap - NJ Farm Brewery Licensing and Fees
Post by: narvin on July 17, 2013, 01:27:16 am

Yes you can self-distribute in NJ and according to the Farm Brewery License you can sell 1.5oz samples on premises but it doesn't specify any amounts, so...


That's awesome, I wish more states allowed self distribution.

I'd check with your liquor board because the license says "sampling purposes only" and a nominal charge usually means a token amount, like $5 for a glass and unlimited samples.  I wouldn't count on making an awful lot of money from that.
Title: Re: Going Pro Cheap - NJ Farm Brewery Licensing and Fees
Post by: cornershot on July 17, 2013, 01:21:23 pm
So you must be "actively engaged in farming". Does that mean you'll first start a hop farm? Are there additional licenses/fees associated with farming? How many hop plants would you need to supply enough to at least use some of your hops in every batch? Picking hops by hand is extremely labor intensive. What about drying and storing your hops? Processing a year's supply of hops, even for a nano, could be a huge challenge. Small scale farming in addition to trying to make a profit from a nano sounds like a daunting task.
Title: Re: Going Pro Cheap - NJ Farm Brewery Licensing and Fees
Post by: euge on July 17, 2013, 06:55:59 pm
Sounds almost French in scope of freedom. BTW, a single coriander plant will yield an amazing amount seed. Of course, you'd want more than one... :D Very appropriate in a "farmhouse ale".
Title: Re: Going Pro Cheap - NJ Farm Brewery Licensing and Fees
Post by: Vin S on July 17, 2013, 07:32:13 pm
Thats great wish CT had one. Tony I would contact N.J. brewing guild and ask them what other info the farm lic dosent show but you would need need. www.njbeer.org
Title: Re: Going Pro Cheap - NJ Farm Brewery Licensing and Fees
Post by: tonyp on July 17, 2013, 09:40:04 pm
So you must be "actively engaged in farming". Does that mean you'll first start a hop farm? Are there additional licenses/fees associated with farming? How many hop plants would you need to supply enough to at least use some of your hops in every batch? Picking hops by hand is extremely labor intensive. What about drying and storing your hops? Processing a year's supply of hops, even for a nano, could be a huge challenge. Small scale farming in addition to trying to make a profit from a nano sounds like a daunting task.

Yeah I dunno, if you go just by the wording of the bill it doesn't state any percentages or amounts. Leaves a lot of room for interpretation in its current state. I mean if you really want to be a stickler you could buy a hop plant, throw it in the ground and use a single leaf in every batch which would satisfy the requirements.

Its like playing by the rules vs. playing by the spirit of the rules.

Just like the sampling part of it, it only specifies the size of the sample, not how many you supply. Now by the wording of the rules, you could supply 1,000 1.5oz samples per person, but the spirit of the rules is more like "everyone can try a small sample of the beers you make and you can charge a small amount if you want to".

Obviously this is what lawyers go to school for, finding loopholes around the letter of the law.

Just as a random example of this, in Formula 1 they added a rule that teams were not allowed to put holes in the floor of the car. What did Redbull do? They opened the hole all the way to outside of the floor. Now its not a hole, its a 'slot'. Does it meet the wording of the rules? Absolutely. Does it still violate the spirit of the rules? Definitely.

I'm going to take VinS advice and contact the N.J. brewing guild and see if I can get more detailed info.

Tony
Title: Re: Going Pro Cheap - NJ Farm Brewery Licensing and Fees
Post by: tonyp on July 17, 2013, 09:43:35 pm
Thats great wish CT had one. Tony I would contact N.J. brewing guild and ask them what other info the farm lic dosent show but you would need need. www.njbeer.org

Awesome idea, I'll do this and report back.
Title: Re: Going Pro Cheap - NJ Farm Brewery Licensing and Fees
Post by: klickitat jim on July 17, 2013, 10:37:52 pm
Will be interesting to see how much beerocrocy there is. Law can say one thing then the agency overlords add to it
Title: Re: Going Pro Cheap - NJ Farm Brewery Licensing and Fees
Post by: cornershot on July 18, 2013, 12:56:52 am
Seems like they want you to have a farm to get the license. Probably trying to promote the local thing. I'd guess the people who issue the license would like to see a "farm" first.
There was a nano bill on the table here in Pa recently that would allow you to brew 1500 bbl a year for $500/ year. Haven't heard anything about it in awhile.
Title: Re: Going Pro Cheap - NJ Farm Brewery Licensing and Fees
Post by: Jimmy K on July 18, 2013, 02:21:41 am
If you're in a barley growing area (common in Delaware anyway) you might be able to rent the land to a grower with the contract stipulating that they'll provide you some of the barley or wheat grown. That might free you from the farming part while satisfying the law. You could keep a small plot to grow fruits/spices/other interesting stuff.  As you're probably figuring, much will depend on how the agency/inspectors interpret the law.
Title: Re: Going Pro Cheap - NJ Farm Brewery Licensing and Fees
Post by: tonyp on July 18, 2013, 08:29:08 pm
Well this is a bust. Just got off the phone with the NJ ABC and it seems the amended bill was never actually signed into law meaning the Farm Brewery License doesn't exist, but the Farm Winery License does. In any case, 3 or 3.5 acres of cultivated land is required for the Farm Winery so I'm guessing it would be similar for the brewery license if it did exist.

*pacman dying sound*

:(

Tony
Title: Re: Going Pro Cheap - NJ Farm Brewery Licensing and Fees
Post by: euge on July 18, 2013, 08:37:03 pm
How much does an acre of rural NJ cost?
Title: Re: Going Pro Cheap - NJ Farm Brewery Licensing and Fees
Post by: tonyp on July 18, 2013, 08:41:35 pm
How much is rural NJ per acre?

not really sure euge, I'm at the Jersey Shore in Toms River and we have approx. 3.8 acres total. We are zoned rural and the property was originally purchased in 1970 I think. This area used to be nothing but chicken/egg/dairy farms back in the day. The rural zoning here is becoming quite rare, and you'd have to travel about 30-40 miles west or south west to be in what's considered actual rural countryside.
Title: Re: Going Pro Cheap - NJ Farm Brewery Licensing and Fees
Post by: tonyp on July 18, 2013, 08:44:43 pm
For future reference, here is the link to the current NJ Liquor Statute as of 2013.

New Jersey Statutes - Title 33 Intoxicating Liquors - 33:1-10 Class A licenses; subdivisions; fees. (http://law.onecle.com/new-jersey/33-intoxicating-liquors/1-10.html)

Tony
Title: Re: Going Pro Cheap - NJ Farm Brewery Licensing and Fees
Post by: majorvices on July 18, 2013, 09:39:52 pm
Why should farmers get more lenient "brewery" regulations that the rest of the people living in NJ?
Title: Re: Going Pro Cheap - NJ Farm Brewery Licensing and Fees
Post by: tonyp on July 18, 2013, 09:54:38 pm
Why should farmers get more lenient "brewery" regulations that the rest of the people living in NJ?

Because farm wineries get the privilege already?

Plus, with the way the bill was worded, you could only sell to consumers so you couldn't compete with plenary/restricted/limited breweries in regards to keg sales at bars. So it would be package sales for off-site only except for samples.
Title: Re: Going Pro Cheap - NJ Farm Brewery Licensing and Fees
Post by: narvin on July 19, 2013, 03:04:08 am
The law in Maryland was introduced to promote the use of local ingredients and farming in general.  This used to be a big farm area before the suburban sprawl and Washington money, and anything that encourages the growth of industries that use Maryland agriculture is seen as a positive.  The current thinking is that local food is good for your health, your taste buds, and the environment.  You pay less for the license but otherwise will have to meet the same requirements as any other licensee.  An advantage here is that you can sell for on-premise consumption from 10am-6pm without a separate class D liquor license.  However, you can only serve your own beer and the restriction that you grow one of the main ingredients for the beer more than offsets the  benefits if you're just looking for a loophole / easy way to get into the business. 
Title: Re: Going Pro Cheap - NJ Farm Brewery Licensing and Fees
Post by: cornershot on July 19, 2013, 09:21:39 am
I'm sure Big Beer's lobbies have everything to do with it. Another reason to never buy their products.
Title: Re: Going Pro Cheap - NJ Farm Brewery Licensing and Fees
Post by: Vin S on July 19, 2013, 03:41:33 pm
I would look at the Restricted brewery that you listed in that N.J link you posted. Not as great as a farm brewery but beats the others buy far. It allows you to sell on site and self distribute to resturants up to 15 gallons.
Title: Re: Going Pro Cheap - NJ Farm Brewery Licensing and Fees
Post by: a10t2 on July 19, 2013, 03:56:28 pm
you still have to deal with the feds and pay a bond but that goes towards your taxes due them anyway.

The bond is held as collateral against the taxes on future production. You only get it back if you go out of business.
Title: Re: Going Pro Cheap - NJ Farm Brewery Licensing and Fees
Post by: morticaixavier on July 19, 2013, 04:20:11 pm
you still have to deal with the feds and pay a bond but that goes towards your taxes due them anyway.

The bond is held as collateral against the taxes on future production. You only get it back if you go out of business.

right. wasn't totally clear there. thanks
Title: Re: Going Pro Cheap - NJ Farm Brewery Licensing and Fees
Post by: Jimmy K on July 19, 2013, 06:51:17 pm
Why should farmers get more lenient "brewery" regulations that the rest of the people living in NJ?
Lots of states help ag businesses out, though I think a state supporting farm breweries is sort of dumb given that you'd need to malt any grain you grow and few areas are great for hops. It doesn't seem really reasonable. And I'd rather see them just support small breweries.
Title: Re: Going Pro Cheap - NJ Farm Brewery Licensing and Fees
Post by: tonyp on July 19, 2013, 07:18:15 pm
I got in touch with my local zoning office and since I'm zoned rural and on a main road I might be able to get a variance to run a limited brewery on site. He told me to write up a description of intended use (and gave me a hint that if I add provisions for growing hops/grain it would help with approval).

We'll see how it goes...
Title: Re: Going Pro Cheap - NJ Farm Brewery Licensing and Fees
Post by: narvin on July 19, 2013, 07:53:03 pm

Lots of states help ag businesses out, though I think a state supporting farm breweries is sort of dumb given that you'd need to malt any grain you grow and few areas are great for hops. It doesn't seem really reasonable. And I'd rather see them just support small breweries.

You can use almost any raw grain as an adjunct.  That's the epitome of farmhouse brewing!
Title: Re: Going Pro Cheap - NJ Farm Brewery Licensing and Fees
Post by: anthony on July 19, 2013, 09:05:46 pm
As pervasive as hops are, I think all areas could be decent for them, specific regions just need more local varietal development (i.e. university powered research and development)
Title: Re: Going Pro Cheap - NJ Farm Brewery Licensing and Fees
Post by: Thirsty_Monk on July 19, 2013, 11:21:46 pm
you still have to deal with the feds and pay a bond but that goes towards your taxes due them anyway.

The bond is held as collateral against the taxes on future production. You only get it back if you go out of business.
You just can buy a bond insurance and you do not get anything back.
Title: Re: Going Pro Cheap - NJ Farm Brewery Licensing and Fees
Post by: anthony on July 20, 2013, 05:07:21 am
+1 on this because you end up paying like 1/10th of what the actual bond would cost.
Title: Re: Going Pro Cheap - NJ Farm Brewery Licensing and Fees
Post by: Jimmy K on July 21, 2013, 01:24:53 pm

Lots of states help ag businesses out, though I think a state supporting farm breweries is sort of dumb given that you'd need to malt any grain you grow and few areas are great for hops. It doesn't seem really reasonable. And I'd rather see them just support small breweries.

You can use almost any raw grain as an adjunct.  That's the epitome of farmhouse brewing!
That's what I mean though. You can have a farm that supplies adjuncts, fruits, etc no problem. But 'farm brewery' implies a brewery that grows the majority of its ingredients - something that's fairly difficult in reality. Though, in reality, many small wineries also grow only a portion of their grapes.
Title: Re: Going Pro Cheap - NJ Farm Brewery Licensing and Fees
Post by: narvin on July 21, 2013, 02:41:19 pm
The license here only says, "The beer to be sold and delivered under paragraph (2) of this subsection shall be manufactured with an ingredient from a Maryland agricultural product, including hops, grain, and fruit, produced on the licensed farm."  That doesn't preclude using wheat or another grain as 30% of the grist.  As long as you aren't violating the spirit of the law by, say, adding one farm grown hop cone per batch, it seems like it should be fine.