No loss leaders at liquor stores, court rules

The Supreme Judicial Court today upheld a state commission's ruling to suspend a liquor chain's license for several days at two stores because it sold alcohol at costs lower than the invoice price it paid, in violation of state regulations.

The state's highest court acknowledged that Total Liquors did not actually take a loss on the liquor, because it had a rebate deal with the suppliers which ultimately reduced the chain's price per bottle to what it sold rum to the public.

But the law is the law and there's nothing wrong with a ruling by the state Alcoholic Beverages Control Commission that such rebates can't be used in determining retail prices if they're not included in the original invoices for the liquids, the court said.

In one case, Total rum sold a brand of rum at $17.99 per bottle at its Everett and Natick stores even though it had paid an invoice price of $19.79 a bottle. Several competitors promptly notified the commission, which ordered the chain to shut one of the stores for two days and the other for three days in penance.

Total argued - and a Superior Court judge agreed - that rebates negotiated before it bought the rum brought the price down to $17.99, and so the company was not actually taking a loss, which would violate state liquor regulations.

But the SJC justices said state law is pretty clear, that the retail price cannot be lower than the invoice price and that was not the case here. Should Total and its distributors figure out how to include future rebates in invoices, then that would be OK, the court ruled.