Tesco backs minimum price for alcohol to curb excessive drinking

In an article in the Daily Telegraph (May 21), Tesco's chief executive Sir Terry Leahy, endorsed the UK Government's commitment to act on below-cost selling of alcohol and said he would support future discussions on minimum pricing.

Tesco have reached their position after consultation with customers, demonstrating that there is also consumer support for change; a poll of its customers which found that nearly 70% thought excessive drinking was one of the most serious issues facing the country.

The UK Government has repeated its commitment to banning the sale of alcohol below cost price as it prepares to launch a public consultation exercise, setting out four options for outlawing the practice.

It has however firmly ruled out introducing a minimum cost per unit, as favoured by the Scottish Government, but the industry has warned that no-one can agree on what the cost-price of drink actually is.

The Coalition Government last month pledged to ban below-cost alcohol sales and has held talks with manufacturers to define what is meant by cost.

The first option is to assess simply duty and VAT, discounting entirely production costs. However, some object to this definition because it would only affect the deepest discounts.

Two other options are to add some cost for the production, distribution and marketing of the product, or to ban sales below the cost of the invoice sent to retailers.

The fourth option is to let retailers work together on fair pricing without fear of prosecution under competition law.

The options will be detailed in a consultation paper next month as part of the Police Reform and Social Responsibility Bill.

Carlsberg's Isaac Sheps said: “If you go only on duty and VAT, it's easier to control because this is a number nobody can mess with,”

Mark Hunter from Molson Coors insisted the cost of production needed to be included if the law was to have any impact.

A Home Office spokeswoman said the Business Department and industry representatives were working to introduce a ban “without unduly impacting on industry or responsible drinkers”.