ACS: minimum alcohol prices will not curb supermarket discounts

Plans for minimum pricing for alcohol

The Association of Convenience Stores (ACS) claims the Government’s impending ban on below cost selling of alcohol will barely affect the supermarket promotions that have attracted criticism.

Under plans to be unveiled by the government later today (18 January 2011), supermarkets will be banned from selling alcohol below the level of excise duty and VAT.

But the ACS has hit out at Ministers’ decision to define the cost of alcoholic drinks simply as tax, with no account for the cost of producing, distributing or selling the products.

ACS chief executive James Lowman said: “After talking tough, the Government have ducked a tough decision. Their final proposal will not curb aggressive supermarket discounts like many of those we saw over the Christmas period. Defining ‘cost’ as just tax is neither realistic, nor credible.”

Ministers made a pre-election commitment to ban the sale of alcohol below cost. However, the issue of finding a suitable definition for cost has proved controversial. The ACS, working in conjunction with the Federation of Wholesale Distributors (FWD), has made the case for the definition of cost to be based on a realistic estimate of production, marketing and distribution of the product.

Lowman said: “The real cost of an alcohol product on the shelf is obviously more than the cost of duty plus VAT. We are disappointed they have not listened to the strong case we made for a ban that reflected more closely the elements that made up the cost of the product.

“The biggest frustration is the duty plus VAT definition will satisfy no one, apart from the big supermarkets, and so the uncertainty and debate will continue to rage. Local shops and wholesalers were keen to see a workable and credible ban in place that would provide certainty.  We will continue to try to bring some common sense to this debate and find workable solutions to this problem.”