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“Representing the on-premise licensed beverage retailers, the heart of the hospitality industry”

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President’s Message
By FRED BARNES

SMOKING BANS & OTHER ECONOMIC BLOWS TO BUSINESS

Two years ago when the New Jersey Legislature passed a “no-smoking” ban in all public places, the New Jersey Licensed Beverage Association urged the Legislature to exempt bars and taverns because we knew it would put the small tavern owners at great economic risk. In fact, we argued that it would put many out of business.

At the time the legislation was being considered, over 60% of the restaurants in America were smoke free; however, that was not the case with your Mom and Pop bars and taverns. Surveys among our members showed that 85% to 90% of our patrons who come into our bars to have a drink and shoot a game of pool were smokers. While smokers were continuing to constitute a shrinking minority in New Jersey, they were not a shrinking minority among NJLBA’s patrons. We estimated that many of our businesses would lose 40% - 50% in alcohol beverage sales.

Since the law went to effect, we hear from many of our members that this has indeed been the case. As you will recall, the law originally intended to ban smoking in New Jersey’s casinos,. But after five of 11 casinos warned they could file for bankruptcy by year’s end the smoking ban was never put into effect. It is interesting to note that the state felt great concern for the economic well being of the casino industry, but expressed no economic concern for the small bars and taverns that were suffering great hardship over the smoking ban, as well as other regulatory and legislative mandates imposed on the hospitality industry.

What’s happening in other States

Last year, many states and cities appeared ready to adopt complete indoor smoking bans, but as the recession worsened and lawmakers feared hurting business at bars, restaurants and casinos, the movement came to a halt! While twenty-three states have indoor smoking bans covering bars and restaurants, there have been no bans enacted in this legislative session.

In Colorado, lawmakers are considering easing the rules after they banned smoking in most bars, restaurants and casinos. In Virginia, a proposed ban stalled this year after lawmakers expressed concern about the economy. In Wyoming, after businesses raised concern, lawmakers last month exempted bars from the legislation. According to Mike Reid, owner of a wine bar in Casper, Wyoming, “In cities that have banned smoking in bars it is just killing them. When someone builds a business with a clientele that smokes, they should be able to go in there and smoke.”

However, there has been no sympathy or concern expressed from lawmakers in New Jersey. In fact, there continues to be legislative proposals put forward that seem intent on bringing great harm to the small bars and taverns in New Jersey.

Issues That Are Devastating the Industry

  • First, there was .08 forced on states through the Federal Highway Bill, led by New Jersey’s U. S. Senator Lautenberg. Lowering of the BAC to .08 meant that now a 120-pound female having two glasses of wine could be over the legal limit and subject to a DUI. This instilled great fear in patrons wishing to have a social or celebratory drink and resulted in a decline in alcohol sales.
  • Then came the “Smoking Ban” driving customers to the outside or staying at home where they could still smoke and have a beer. Again, sales were lost and business was hurt.
  • Now, MADD is once again on a crusade to have interlock devices mandated for all DUI offenders, even “first timers”. Their long-term goal is to have these devices installed in all vehicles, and to once again get “pro-interlock” legislation into the upcoming federal highway bill. This will impose not only great costs on consumers, but also cause an erosion of their freedoms, resulting in everyone fearful of going to a bar or tavern to have a drink. Meanwhile, the repeat offender and the hardcore drinker will still find a way to drink and drive.
  • Then there was “Family Leave” which applied to all businesses with 2 or more employees;
  • Let’s not forget Xanadu and other “economic development” projects where “special liquor licenses” are being approved while our licensees have paid anywhere from $500,000 to $1 million dollars; and then
  • On Thursday, February 5, 2009, new Fire Code regulations went into effect by the Department of Community Affairs that will bring great economic hardship to “eating and drinking” establishments. Why? Because the new definition of “night club” will now apply to establishments with an occupancy load of 100. By becoming a “night club” you will now have to install an automatic fire detection system, tied to the performance sound system and the house lights. You will also be required to install an automatic sprinkler system; and the “egress” requirements may require structural changes, which may be impossible in some cases. Should your business fall under the “nightclub” definition, it could cost as much as $30,000 per business to be in compliance!

NJLBA fought until the final hour to keep these regulations from going into effect, or to at least obtain some changes in the definition of “nightclub”. However, the Department denied our request for relief. While we will continue to seek changes to these regulations through the legislative process, in the meantime the regulations are in effect and carry the weight of law.

While New Jersey may claim they care about small business, their actions appear more like they are trying to “kill small business - especially the small bars and taverns”.

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