Ban on the sale of cheap alcohol
Supermarkets, shops and pubs are to be banned from selling alcohol below a minimum price for the first time, under Coalition plans to be unveiled today.
Ministers will announce measures to stop retailers offering customers drinks for less than the tax they pay for it as the first step in a crackdown on binge drinking.
However, stores and landlords will not have to take into account the cost of producing the drinks when setting a price meaning they can still sell the drinks at a loss in order to entice customers to buy more.
It will mean a four pack of lager could still be sold for around £1.50, a bottle of spirits for less than £8, a bottle of wine for little more than £2 and a can of cider for around 20p.
The Coalition Government pledged to combat cheap drink promotions and end the selling of alcohol at below cost.
Under plans to be unveiled by the Home Office today retailers will be banned from selling drinks for less than the value of duty and VAT owed on them.
It will, for the first time, effectively set an individual minimum value for each product under which the price cannot drop.
The average duty per unit of alcohol is 17p for beer, 18p for wine, 7p for cider and 24p for spirits. VAT would add another 20 per cent on top.
A Whitehall source said it was an “important step in delivering the Government’s commitment to ban the sale of alcohol below cost”.
The source added: “It will have the effect of setting the lowest level at which different strengths of alcohol can be sold – by stopping the worst instances of deep discounting and preventing alcohol being sold both cheaply and harmfully.
“This sends a clear signal to retailers and the public that the Government takes this issue seriously and importantly will have a limited burden on business and can be delivered at low cost to the taxpayer.”
But the announcement means the Government has stopped short of setting a blanket minimum unit price for alcohol – such as 50p per unit – which would have pushed up the average price of all products.
It is understood officials were concerned such a move would run in to legal difficulties. Similar proposals in Scotland were dropped.
It also means supermarkets and shops can still sell drinks at a loss because there will be no legal obligation to cover the initial cost of buying in or producing them.
The move comes despite the Tories promising to end so-called “loss leaders” when in opposition.
Leading alcohol experts, MPs and pub groups last night warned it would “no meaningful impact” on either the price of drinks or alcohol abuse while pub groups warned businesses would continue to suffer.
Tory MP Andrew Griffiths, secretary of the all-party parliamentary group for the misuse of drugs and alcohol, dismissed today’s move as a “pointless exercise”.
“I support the Government’s intention to stop the supermarkets’ dangerous pricing policies but this proposal will simply fail to do that,” he said.
“Whatever mechanism for below cost selling they bring in must lead to an increase in the price of booze on supermarket shelves but this will still allow them to slash prices and sell cans of strong lager cheaper than cans of Coca Cola.
“The reality is this matter is well intentioned but it will not stop supermarkets using alcohol as a loss leader and it certainly will not help pubs and small shop owners.”
And Sir Ian Gilmore, a liver specialist and chairman of the UK Alcohol Alliance in the Royal College of Physicians, said: “It is a remarkably low floor which will catch very, very few products,” he said.
“It will impact on a tiny fraction of special offers and will have no meaningful impact on the health consequences of alcohol misuse.”
In 2009, the then shadow licensing minister Tobias Ellwood said: “I don’t want to see any loss-leading of alcohol going on. It won’t go on in the future.”
More than 100 MPs have signed a parliamentary motion by Mr Griffiths calling for measures to raise the price of alcohol.
Jonathan Mail, head of public affairs at Camra, said: “We think the decision is a betrayal of the Government’s promise to ban below cost alcohol sales. It will allow supermarkets to continue to sell alcohol below cost unhindered.”
However, the Wine and Spirit Trade Association has described the move as the “most practical way to bring in a ban”.
A spokesman for Asda, which has already introduced such a policy, added: “Six months ago we announced that we wouldn’t sell alcohol below the cost of duty plus VAT. We also called on the Government to establish a floor price below which it would be illegal to sell alcohol and hoped that they would follow our lead.”
But Brigid Simmonds, chief executive of the British Beer & Pub Association, said: “This is a clear measure that can be implemented quickly and will stamp out the worst cases of below-cost selling. However, it will not have a significant impact on low-priced alcohol in supermarkets.
“With 70 per cent of alcohol now sold in the off-trade, there is a real need for the Government to do more to support the pub.”