How are NJ’s current liquor laws affecting small business?

BY Leah Mishkin, Correspondent |

The recipes come all the way from Sicily. Carlo Castronovo is the owner of Giusseppe’s Pizza in Old Bridge. He’s one of five brothers and they all have pizza shops in New Jersey.

“I started out just me and one guy in a kitchen and we grew into a nice little place,” Castronovo said.

But he says his business would grow even more if he had a liquor license. The problem, he says, is they are way too expensive. He says his brothers and fellow pizza shop owners also can’t afford it, with the exception of one.

“One of them has a liquor license in West Orange. It was very difficult, but he got it,” Castronovo said.

Alcoholic beverage industry attorney Robert Skene says because there are caps on how many liquor licenses are in circulation, and because a license has to be used by a bar or restaurant in the municipality in which it was issued, the costs can be extreme.

“In places like Paramus, you’re talking about $1.8 million. Cherry Hill probably $1.5 million. Bridgewater has gone through the roof. It’s probably over a million in Bridgewater,” Skene said.

Assemblyman John Burzichelli says those costs are limiting economic growth across the state.

“We think there’s a big part of the economy that’s being held back because these small businesses can’t get a liquor license,” he said. “Mayors of downtown communities working to revitalize know that restaurants are the key. A restaurant has a better chance of surviving if they can sell a drink or two along with dinner.”

“It’s not just the restaurants that benefit, but the ripple effect to other businesses in the area. It could be a coffee shop, it could be a bagel shop, it could be a pastry shop, and other businesses and really create a vibrant downtown,” said League of Municipalities Assistant Executive Director, Mike Cerra.

But remember, people have been paying hundreds of thousands of dollars, and in some cases over a million, to get their hands on a liquor license.

RELATED: How do the state’s liquor license laws work?

Those people know if the system is changed they’re at risk of losing their investment. People we spoke with said just look at what happened to taxi medallion owners in New York City. At their peak they were worth over a million dollars, and now they’re being sold for around $200,000 because of external ride-sharing companies disrupting the market.

“We certainly want to redevelop blighted areas. We want to get new business. We certainly want more restaurants, but we have to do it in a way that is equitable and fair to those that have bought into an existing system,” said Marilou Halverson, president and CEO of the NJ Restaurant and Hospitality Association.

The question is how do you get all the players who have a stake in the process to agree on one solution?

“To get there is difficult because you want to protect and respect those who have invested already in the licenses, but you also want to open up what is potentially a very significant economic development tool, particularly for smaller communities,” Cerra said.

In the meantime, restaurant owners like Castronovo wait to see how it plays out. He’s hoping by the end of it he and his brothers will have a chance to buy a cheaper, sub-class license to sell beer and wine.

“It’s great for business. It’s great for customers as well, if they have an option,” he said.