The Government must urgently review its definition of ‘below cost’ for alcoholic products, says the FWD, after it was revealed that the proposal of a minimum price of duty plus VAT would have no effect on supermarket price promotions.
Data provided by promotions consultancy Assosia and published in The Guardian revealed that only one of 3,667 alcohol promotions in Tesco, Sainsbury, Asda and Morrison’s in the last three months was at less than the cost of duty plus VAT.
The figures confirm the widespread view among both health campaigners and small business supporters that the Government’s plan, which Home Office minister James Brokenshire said would “stop the worst instances of deep discounting,” would be ineffective in raising supermarket prices.
FWD has consistently argued that a meaningful definition of ‘below cost’ must include production, marketing and distribution costs in the calculation. “Last month’s decision was a green light to supermarkets to continue selling alcohol at prices that create inequalities in the grocery supply chain,” said FWD chief executive James Bielby. “It is already obvious that this definition is inadequate, and we will we will continue with our efforts to persuade the government to adopt a more credible and realistic definition.”