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'.
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