Supermarkets could still sell beer for 38p

Supermarkets could still sell cans of lager for 38p and litre bottles of vodka for £10.71 under its plan to ban "below-cost" alcohol sales, the Government has confirmed.

The Government has spelt out threshold for stores under its controversial definition of below cost as being duty plus VAT.

Premises would be banned from selling:

• A litre of vodka (37.5% abv) for less than £10.71

• 440ml of lager (4.2% abv) for less than 38p

• litre of cider (4.5% abv) for less than 40p

• 700ml of whiskey (40% abv) for less than £8

A Home Office report on the evidence behind the proposal says: "Little is known about how the alcohol industry may be affected by alcohol pricing policies."

However, it says that "major retailers may benefit more from pricing policies".

It also says that both producers and supermarkets "and to some degree the on-trade" may "adopt strategies to avoid potential losses or to keep prices the same following an introduction of a pricing policy."

Home Office minister James Brokenshire said: 'We know that pricing controls can help reduce alcohol-related violent crime and this is a crucial step in tackling the availability of cheap alcohol.

"In nearly half of all violent incidents the offender is believed to be under the influence of alcohol. That's why we believe it is right to tackle the worst instances of deep discounting.

"By introducing this new measure we are sending a clear message that the government will not stand by and let drink be sold so cheaply that it leads to a greater risk of health harms or drunken violence."

Failure to deliver​

Pub trade chiefs have hit out at the definition of below-cost, saying it should take into account production costs.

"Today's announcement is a fudged compromise — a ban based on duty plus VAT fails to deliver the very clear commitments the Government gave that they would ban below cost selling," said Association of Licensed Multiple Retailers chief executive Nick Bish.

"It will make no difference to pocket money prices on the high street nor the irresponsible retailing practices of Britain's supermarkets.

"Actually, today's announcement will make matters worse because it effectively legitimises the status quo and will see the price differential between pub and supermarket widen."

Bish called for a package of measures to support the below cost ban, including outlawing irresponsible promotions in the off-trade as they are in the on-trade.

"We simply want a level playing field and the ban on irresponsible promotions extended to anyone who sells alcohol," he said.

Practical​

But Wine & Spirit Trade Association chief executive Jeremy Beadles said: "We have consistently argued for a ban on the sale of alcohol below the level of duty plus VAT on the basis that these are both consumer taxes and therefore the cost should be passed on to the consumer.

"This is the practical way to implement this policy.

"It is important this policy is applied nationally. We are sure Ministers will want to ensure it is not undermined by separate and different price initiatives by local authorities.

"It's equally vital to recognise that alcohol pricing and taxation cannot provide the solution to alcohol misuse. What's needed is education and rigorous enforcement of laws to address misuse and related anti-social behaviour."

• More reaction: Pub trade fury at below-cost plans​​