ABCC FINDS SHAW’S SUPERMARKET IN VIOLATION FOR SELLING BEER AT PRICE BELOW INVOICED COST

Law Offices of John P. Connell, P.C.: In a recent ABCC decision, the ABCC issued Shaw’s Supermarket, Inc. a “warning” after finding that Shaw’s sold 30-packs of certain well known beer brands for $19.99 when it was determined Shaw’s had actually purchased those 30-packs from a beer distributor for $20.60 a 30-pack. See In Re: Shaw’s Supermarket, Inc. (October 19, 2016). Supermarkets, liquor stores and convenience stores in Massachusetts that are in possession a Section 15 liquor store license are strictly prohibited from selling to the public at retail any alcoholic beverages for a price less than the price for which that licensee purchased that product from a wholesaler. Specifically, 204 CMR 2.04(1) provides as follows:

 No holder of a license issued under G.L. c. 138, §15 shall sell or offer to sell any    alcoholic beverages at a price less than invoiced cost. Cost is defined as net cost      appearing on the invoice for said alcoholic beverages. The use of any device, promotion or scheme which results in the sale of alcoholic beverages at less than invoiced cost is prohibited.

In this case, the ABCC investigated Shaw’s after receiving “numerous complaints” regarding Shaw’s pricing of its alcoholic beverages. In mitigation, Shaw’s was found to have been selling alcoholic beverages since 2003 without a prior violation, and therefore only a “warning” was warranted. As the competition between larger and smaller outlets for off-premises sales in Massachusetts continues to intensify with many larger stores coming on-line, profit margins remain competitive but it is important to recall that a profit margin for all sales is still required.

(c) 2017 Law Offices of John P. Connell, P.C.

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