Business & Tech

Beer at Target’s Fenway store was too cheap, state says

The Alcoholic Beverages Control Commission says Target’s store in the Fenway neighborhood (above) violated a longstanding state rule that bans retailers from selling alcohol for less than what they paid.
David L. Ryan/Globe Staff/File
The Alcoholic Beverages Control Commission says Target’s store in the Fenway (above) violated a longstanding state rule that bans retailers from selling alcohol for less than what they paid.

The state’s crackdown on super-cheap booze isn’t over.

Regulators at the Alcoholic Beverages Control Commission have cited Target’s store in the Fenway neighborhood of Boston for violating a longstanding state rule that bans retailers from selling alcohol for less than what they paid.

In December, the ABCC said, Target’s huge Boylston Street location briefly offered 15-can packs of Founders All Day IPA for $11.99. But when ABCC investigators — following up on a complaint about the deal — showed up and asked a Target manager for invoices, the records indicated the store had paid its wholesaler $14.25 for each pack.

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Target faces a May 23 hearing on the alleged underpricing. If ABCC commissioners rule that a violation occurred, they could issue a warning or suspend the store’s liquor license. (Alcohol licensees are often allowed to pay a fine rather than shut down, however.)

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In a brief statement, a Target spokeswoman suggested the low price was an unintentional error and said the company’s stores “work to comply with all state guidelines on liquor pricing.”

“One item at a Boston store was temporarily listed with an incorrect sale price,” the spokeswoman said. “We updated the price as soon as it was brought to our attention.”

Target is the third large retailer to have been charged with underpricing in recent months. In October, the ABCC warned the Shaw’s supermarket in Franklin for charging $19.99 for 30-packs of beer that cost it $20.60 at wholesale. And in January, it suspended the license of the country’s largest alcohol retailer, Total Wine & More, for allegedly selling Smirnoff vodka, Bacardi rum, and other liquors for $1 to $6 below their wholesale costs at its Everett and Natick shops.

The citations represent a sharp uptick in enforcement of a rule that was last applied in 2013, according to the ABCC’s calendar of hearings. In each of the recent cases, the citations stemmed from anonymous complaints, which regulators have acknowledged probably came from independent package stores.

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Smaller shops have complained repeatedly that they will be driven out of business if large retailers that already get volume discounts from their wholesalers are allowed to implement predatory “loss-leader” pricing schemes.

State officials have also defended the regulation, arguing that a race to the bottom on alcohol prices would lead to excessive consumption.

But Total Wine, which was cited several times for alleged underpricing and acknowledged ongoing investigations into more possible violations, has challenged its license suspension. In a lawsuit it filed this year against the ABCC, the company said state pricing restrictions are a form of government-sponsored protectionism, sheltering small retailers from competition while driving up prices for consumers. That case is pending in court.

The debate over minimum pricing is heating up amid changing dynamics in the state’s retail alcohol market. Under a 2011 state law, the number of retail alcohol licenses a single company can hold was increased to five from three in 2012, and then to seven in 2016. The final increase, to nine licenses, will take effect in 2020.

Dan Adams can be reached at daniel.adams@globe.com. Follow him on Twitter @Dan_Adams86.