Boston Court’s Verdict
A Boston judicial official has determined that liquor sellers in Massachusetts are permitted to offer significant discounts when purchasing alcohol in large quantities. This ruling counters state regulators who believed that such discounts could contravene a state statute prohibiting the sale of alcohol below its cost.
The Lawsuit’s Origins
According to The Boston Globe, the verdict from Suffolk Superior Court Judge Robert B. Gordon was the outcome of a lawsuit initiated by the nation’s premier liquor retail chain, Maryland’s Total Wine & More, against Massachusetts’ Alcoholic Beverages Control Commission (ABCC).
ABCC’s Actions and Total Wine’s Response
Earlier in the year, the ABCC penalized Total Wine’s stores in Everett and Natick by temporarily revoking their licenses for reportedly selling certain liquors like Smirnoff vodka and Bacardi rum at prices $1 to $6 less than their acquisition prices. State regulations prohibit retailers from introducing such below-cost promotions, claiming it’s essential to curb overconsumption and prevent aggressive pricing strategies.
However, Total Wine contested these suspensions. They contended that their customer pricing wasn’t genuinely beneath the cost, rather it reflected bulk order discounts they anticipated from their distributors in the future. They believed the ABCC was unjustly overlooking the ultimate cost to them, focusing instead on initial bills with elevated prices.
Judge Gordon’s Ruling
Judge Gordon sided with Total Wine. He remarked that the ABCC’s narrow and literal interpretation of “cost” didn’t align with the legislative intent of preventing unfair pricing tactics. His ruling stated, “It’s evident there wasn’t any aggressive pricing strategy here. Instead, it was a commendable initiative by a retailer to extend the benefits of bulk purchasing to its customers. Such practices ought to be encouraged, not penalized.”
The Broader Implications
However, Judge Gordon chose not to address Total Wine’s assertion that the pricing statute contradicts US anti-trust laws. The company had previously raised this point in an unsuccessful federal case against a similar pricing policy in Connecticut. This means that Massachusetts retailers remain restricted from selling below cost. This offers some solace to owners of smaller liquor shops who believe that this rule prevents massive chains like Total Wine, which can absorb losses, from adversely impacting their businesses.
A representative for state Treasurer Deborah Goldberg, who supervises the ABCC, revealed that the commission is still examining the judgment and hasn’t yet determined any future actions, as informed by the Globe.