I tried Google with little luck. Thought I’d try here as I’m sure others have tried to do this in the past. I will, of course, be calling an attorney at some point before moving forward. Was hoping to find someone who’s tried this before, first, and piggyback on their knowledge.
I have a friend opening up a restaurant in NJ. He’d like a reserve wine list. The restaurant is a steak place, so he mostly needs Calif Cabs and Bordeaux, 2 categories that I’d love to lighten up on as I bought too much back in the day and then everything turned to Burg and Barolo and Northern Rhone. I’d also like to help my friend with the overall startup costs for a new restaurant; Not having to pay for wine inventory would be a big help for him.
So, we called someone at the state liquor authority and they were hazy at best, suggested we call back later.
Has anyone here tried to do this in NJ before? Crazy laws in NJ, seems there are 29 different possible liquor licenses you can get. Has anyone either succeeded or failed?
Can’t really help as I’m in Cal and there is no point in trying to apply one state’s rules to another. But I Am pretty sure that it technically can’t be done here. There are strict limits to the credit terms under which a licensee can acquire booze and rules controlled returns. Both geared to hinder consignment. If an account’s invoice becomes unpaid for a certain number of days (60?) they are not legally supposed to be extended any more credit. One can debate whether that is a protection for the creditor, but that’s the law.
Of course that is of no help in your NJ case other than, as you know, necessitating that you get the scoop straight from the governing body.
Sherri. The restaurant has a liquor license to sell wine and booze, and can buy wine and booze from both local liquor stores and also the liquor distributor.
The restaurant is opening in Newark if that’s of interest.
Then it is probably not legal, or more likely it is not a true consignment in the eyes of the a.b.c… I do not know how they define it exactly, but they specifically prohibit wine transactions which they deem “consignment”. The key aspect being that the title is retained by the supplier and it can be returned by the establishment on an open ended basis. There are also rules simply as to setting a maximum time for a bottle to be purchased and then returned to the supplier by the establishment.
My guess would be that Mina was able to pluck bottles from the private seller, but purported to take ownership as soon as they took them and pledged to pay with the law’s timeframe and never return items. So practically one can probably achieve most of the benefits of a consignment via nuanced terms, but unfettered consignment is not the law.
This is actually and precisely what I plan to do with my friend.
He has storage space. I’m going to ‘rent’ storage space from him for $1 per year.
After he makes the sale to the patron, he comes to my storage facility (in his restaurant) and ‘buys’ a bottle from me at a pre-agreed upon price. He takes the bottle out of the cellar and it’s his. No give backs. If corked or cooked or whatever, his risk (it’s imbedded in the price).
Wow NJ can be tough, you can only carry in 1 gallon of wine in a 24 hour period. So if you were to drive up to Scarsdale and pick up a case of wine and bring it back to NJ that is not allowed.
I know of restaurants and wine shops in LA that sell wine on consignment. Title passes and they pay when the bottle is sold. Not legal, but not uncommon, either.
Peter as Ian is a retailer in NJ I’d listen to him. If you want to explore possible legal loopholes find an attorney that specializes in obtaining liquor licenses for restaurants. Everything else is bs.
PURCHASE FROM UNAUTHORIZED SOURCE
FROM WHOM CAN A RETAIL LICENSEE PURCHASE ALCOHOLIC BEVERAGES?
A retail licensee is permitted to purchase alcoholic beverages for resale only from New Jersey licensed wholesalers or suppliers. If such New Jersey distributor lists an alcoholic beverage product in its C.P.L. or offers it for sale to retail licensees, the retailer may presume it is properly authorized to be sold and the retailer may then purchase it and offer it for sale to the consumer unless the retail licensee has actual knowledge to the contrary.
Generally, a retail licensee may not purchase alcoholic beverage products from any wholesaler or any other person who is not properly licensed by the New Jersey Division of A.B.C., nor may any such products be purchased from another retail licensee. (N.J.S.A. 33:1-2; N.J.A.C. 13:2-33.1.) (See “Brand Registration” and “Retailer to Retailer Sale.”)