The Government is considering four options to ban below-cost selling of alcohol and is planning a forthcoming public consultation. According to a press release:
The coalition pledged in June to ban below-cost alcohol sales and has held talks with the industry to define what it means by "cost". The Grocer magazine said the Home Office told industry lobbyists it is working on four possible options, the first of which defines cost as simply duty and VAT. This is the definition used by leading supermarket chains, including Morrisons, which last month called on the Government to ban the sale of alcohol below this figure.
However, many in the industry objected to the definition on the grounds that it would only affect the deepest discounts and attributed no cost to the product itself, the trade magazine reported. Two other options were to add some form of cost for the production, distribution and marketing of the product, or to ban sales below the cost of the invoice sent to retailers. The fourth option was to allow retailers to work together on fair pricing without fear of prosecution under competition law. A minimum cost per unit had been ruled out, the Grocer said, although this is still expected to be accepted in Scotland.
The four options would be presented in a consultation document in early August as part of the Police Reform and Social Responsibility Bill. Carlsberg UK chief executive Isaac Sheps told the magazine: "If you go only on duty and VAT, it's easier to control because this is a number nobody can mess with." But Mark Hunter, chief executive of brewing company Molson Coors, said the cost of production needs to be included if the law is to have any impact.
Over recent months there has been signifcant discussion over the options and potential impact of banning below cost sales including 'fears that the off-trade would beat the ban'.
Comments