Supermarkets branded "immoral" over loss leading

Supermarkets have come under fresh fire in Parliament for selling alcohol as a loss leader - with one MP branding the practice "immoral".

During a no-holds-barred session on Tuesday representatives from Asda and Tesco faced a series of probing questions from MPs.

Both supermarkets admitted they sell alcohol below-cost.

Rob Chester, Asda's head of licensing, told the Home Affairs Select Committee: "We will certainly at times sell alcohol below cost. When items are on promotion for short times, absolutely that is possible."

Alan Brown, Tesco's director for group loss, prevention and security, said: "In a fiercely competitive market we compete with the pricing strategies of other retailers.

"In response to competition we will sell below the market price."

But Chester argued Asda took its responsibility towards selling alcohol very seriously. "The vast majority of our customers that buy alcohol consume it perfectly responsibly," he added.

However the fiercest criticism came from Patrick Mercer MP. "I don't feel the words 'loss leader' and 'responsibility' sit comfortably together," he said to Chester. "May I suggest that you substitute the word responsible for 'irresponsible' or 'immoral'.

Chester responded: "I can only disagree".

Earlier Martin Salter MP said it was "bonkers" that people can buy cans of strong lager cheaper than water.

However Chester replied: "I can absolutely tell you that Asda Smartprice water is cheaper than Asda Smartprice lager."

Rob Hayward, chief executive of the British Beer & Pub Association, who also presented evidence to MPs, said cheap alcohol in supermarkets had "impacted enormously on the pub industry". "It's now recognised that 80 to 90 per cent of youngsters pre-load before they go out at night," he said.

The committee session, looking at the impact of alcohol on policing, came the day after health secretary Alan Johnson said the government was willing to take "mandatory action" against supermarkets.

The session also revealed the issue of loss-leading is very much in the minds of MPs. Mark Hastings, communications director at the BBPA, said: "The term is on the lips of every politician in Westminster."

However Hastings warned that any government action on pricing is also likely to affect the on-trade, as well as the off-trade.

All eyes remain on the result of an independent study into the relationship between alcohol, price, promotion and harm, due in August.