Could New Jersey Finally Reform its Liquor License Quota System?

New Jersey is notorious for its liquor license quota system for restaurants, only allowing one license per 3,000 residents. This arbitrary limitation on supply has inflated the prices of these licenses beyond what many restauranteurs can even afford. In NJ.com, columnist Paul Mulshine discusses recent legislation that has advanced which would reform the state's quota system:

In 1947, the holders of liquor licenses managed to buy enough legislators to attain passage of a law that created an artificial monopoly on liquor sales.

This had the effect of pushing up the value of the licenses to levels that can now exceed $1 million. And that has had the effect of stymieing the growth of the state's restaurant industry.

That may be about to change. For the first time since that iron curtain descended there appeared a rip in it. That occurred last week when an Assembly committee advanced a bill that would finally open up the alcoholic beverage industry to competition...

The key argument that won the day was the role of restaurants as anchors for the sort of economic development so desperately needed now that retail stores are closing because of competition from the internet.

One couple who own a restaurant in Jersey City, and who brought along their baby for emotional impact, noted that New York never adopted New Jersey's practice of limiting liquor licenses. They said they had been living in Brooklyn when a boom in restaurants that serve drinks brought an economic revival.

Another couple who brought along a baby were Robert and Magdalena Pluta. They run Leonardo's restaurant in Lawrenceville just north of Trenton.

"The food costs are going up," Pluta told me. "It's hard to sell meatballs and linguini and make a profit. The mom-and-pop restaurants are struggling."...

Read the whole column here.