Concerns over plan to increase number of NJ liquor licenses

New Jersey Gov. Phil Murphy says he wants to expand the number of liquor licenses in the state and eventually get rid of limits.  That is concerning to people who have spent upwards of $1,000,000 to buy a license.

The NJ Restaurant & Hospitality Association is following the issue closely.

Dana Lancellotti is the President and CEO of the group.

"A lot of investors are nervous, "Lacellotti says.

Liquor licenses are currently capped by a locality's population.  There can be one liquor license per 3,000 residents in the municipality.  It has made the value of the licenses, which can be resold on the open market, soar in value.

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At his state of the state address, Murphy called the rules "antiquated and confusing" and a hindrance for businesses that don't have them.

"It has obviously been a long, long-standing issue," Lancellotti says.  "It's a messed up system."

Murphy wants to relax and eventually end current restrictions.  He suggests providing a tax credit to businesses that have already invested in a license of their own since they would become worthless.

"The old rules have purposely created market scarcity and driven up costs to the point where a liquor license can draw seven figures," Murphy said.  "For many small, independent restaurateurs...that’s just too high a price to pay."

But Lancellotti says the industry needs to see more details.

"Overnight people could be losing a tremendous amount of their investment," Lancellotti says.

The governor claims that ending the license limit could generate up to $10 billion in new economic activity over 10 years.  He also claims that it could create upwards of 10,000 jobs annually.

Murphy also wants to change what he calls "outdated licensing and operating restrictions" on breweries and distilleries.  Among the things they can't do right now is to serve food.  That rule was put in place to protect restaurants that have liquor licenses to avoid competition.