Retailers to be banned from selling cheap alcohol

Plans for a minimum price for alcohol in England and Wales are to be announced by ministers, preventing shops and bars from selling drinks for less than the tax they pay on them.

The minimum pricing would work out at 38p for a can of weak lager and £10.71 for a litre bottle of vodka.

The Government aim is to prevent binge drinking.

The move will be aimed at supermarkets who use alcohol as a loss leader to attract customers, and make money from other items shoppers put in their baskets. Banning the sale of below cost price is defined as the tax drinkers pay, duty plus VAT.

The Home Office is proposing to set a minimum price of about 21p per unit of beer and 28p per unit of spirits.

The Association of Convenience Stores has hit out at the plans to define the cost of alcohol simply as tax, with no account for the cost of producing, distributing or selling the products. It said that as a result of the decision, the Government’s impending ban on below cost selling will barely affect the supermarket promotions.

The ACS proposes that the definition of cost should be based on a realistic estimate of production, marketing and distribution of product.

Chief executive James Lowman said: “The real cost of an alcohol product on the shelf is obviously more than the cost of duty + VAT. We are disappointed that 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.”