Government moves on below-cost alcohol

7 July, 2010

A ban on the selling of alcoholic drinks at below-cost prices has moved a step nearer after the Government outlined its thinking on the issue ahead of a public consultation.

In talks with manufacturers and industry lobbyists, the Government has set out its options for the new measure. They include a definition of ‘cost’ as duty and VAT only, which would halt very deep discounting of alcoholic drinks but still give retailers plenty of scope for cheap deals; or creating a formula that would add to this fixed costs for the production and marketing of the drinks. A third option is to ban sales at prices below the invoiced cost of the drinks to retailers, and a fourth is to leave retailers free to determine what might be ‘fair’ pricing between themselves.

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