New Jersey has very restrictive laws when it comes to obtaining a liquor license. The licenses are issued based on population, which limits their number. This limit on the amount of allowable licenses means many liquor licenses in New Jersey are bought from existing license holders. Because of the high demand, bidding wars for existing licenses can drive up the price to astronomical amounts.
A license must be sold in the municipality where it was originally issued. Sales of these licenses are private – and therefore the amounts are unknown – but the executive director of the New Jersey Licensed Beverage Association believes one license sold for as high as $1.8 million. The director estimates the average for a liquor license to be $350,000 in 2017.
Application for a Liquor License
Currently, there is one 12-page universal application form for all types of liquor licenses – both municipally issued and state-issued – in New Jersey. This application requires information about the business owner and where the business will be located. The applicant is asked to describe the building and adjacent grounds, and asked to explain how close the business will be to a church or school. The application is detailed and lengthy, and must be filled out accurately and signed by the right people, including the head of the corporation asking for the license. A liquor license must be renewed every year.
Types of Licenses
There are a variety of licenses for the brewing, distilling, consumption and sale of beer, wine and liquor.
Plenary Retail Consumption License: This allows the sale of alcoholic beverages for consumption on the premises as well as the sale of package goods for consumption off the licensed premises. These sales can take place only from the "principal public barroom," and the package goods must be displayed for sale on the "premises' perimeter walls or behind the bar, unless a floor plan was approved by the Director prior to the late 1970s and that floor plan is available for inspection."
Brew Pub: Referred to in the alcohol beverage control (ABC) law as a "Restricted Brewery License," this permits the brewing of "malt alcoholic beverages in quantities not to exceed 3,000 barrels per license term. " This license can only be issued to a person who also owns a Plenary Retail Consumption License, "which is operated in conjunction with a restaurant regularly and principally used for the purpose of providing meals to its customers and having kitchen and dining room facilities." Also, the restricted brewery licensed premises must adjoin the restaurant.
Bring Your Own Bottle: This is the easiest and cheapest way to go, but restaurants that don't sell their own liquor typically make a lot less money. This type of license is available unless there is a municipal ordinance prohibiting it, and it allows customers to bring their own wine or beer – not liquor – to drink at the restaurant. The restaurant owners can supply glasses but are not allowed to charge any type of fee. Also, the owners are prohibited from advertising their BYOB option.
The standard fees for certain types of liquor licenses in New Jersey are:
- To make and sell beer: Plenary Brewery, $10,625
- To make and sell spirits: Plenary Distillery, $12,500
- To serve alcohol at a restaurant: Plenary Retail Consumption License, $250 to $2500 per year
- To make and sell wine: Plenary winery, $938
A Liquor License Is an Asset
Because a license can be sold or transferred when a business is sold or shuts down, a liquor license can be thought of as an asset that increases in value. So while you may spend a lot to obtain the license, as long as people like to drink and the laws remain in place, a liquor license will likely rise in value.