Brewer warns over cheap supermarket booze

Scottish & Newcastle has hit out at cheap supermarket booze - which it says encourages irresponsible drinking.

The brewer made the complaint to the Competition Commission, which is investigating the grocery market and the power of the "big four" supermarkets.

S&NUK's submission to the inquiry says supermarkets sell alcoholic drinks at low prices — sometimes below cost — in order to attract customers into stores.

It also says the average price of a unit of alcohol in supermarkets is a third of the average in the on-trade (30p compared to £1.02).

The submission reads: "We view with concern the willingness of the major multiples to invest in relatively cheap beer and cider prices, to drive 'footfall' within this sector."​

"We strongly believe that the sale of alcoholic drinks at low cost, used primarily to drive "footfall" into stores, is not consistent with the promotion of responsible drinking."

"For example, there is now firm anecdotal evidence that drinkers are consuming cheap alcohol at home prior to crossing over into the on-trade for a night out, and then topping up at pubs or bars.

"Furthermore, with the advent of public place smoking bans, now in Scotland and due in England, Wales and NI, we expect the demand for this type of home consumption to increase. Given this likely development, we believe that the emphasis on low price to drive "footfall", placed on beer and cider, is an unwelcome feature in the grocery market."

S&NUK's complaint comes days after the Morning Advertiser reported an MSP was asking the Scottish Executive to do something about cheap supermarket booze.

The Competition Commission expects to start taking evidence in September, with the inquiry expected to be completed by October next year.

Your Comments​Kevin O'Connor​via email, 31/07/2006Whilst I applaud the statement from Scottish & Newcastle the fact is that they and the rest of the big brewers sell to supermarkets at a complete loss.

The supermarket price does not even cover the duty charged on a 5%ABV lager let alone VAT or the retailers profit margin.

If they and the rest of the brewers are sincere they should join with our "masters" in our industry to lobby the government on behalf of the on-trade.

Robert Feal-Martinez​ via email 31/07/2006"It is so refreshing to see at least one company connected with our industry to say what Licensees have been saying for years. It cannot make viable economic sense for Brewers to give their products away to supermarkets. Lets hope the bigger companies like Interbrew follow suit. Then the Government may just be forced into acknowledging that the real 'binge drinking' problem is in fact caused by the supermarkets and off licenses not the 'On' trade. But can we see HMG curbing them, Lord Sainsbury and all."

Reg Pearson​ via email, 01/08/2006It's good that S&NUK criticises the supermarkets for selling cheap beer.

However, they are one of the chief protagonists in this trade.

It seems to me they have 2 choices. Either say no to the supermarkets & put the prices up or, and this will not go down well, put the prices down to the on-trade & give us a chance.

I wonder which route they would rather take?

Robert Feal-Martinez​ via email 03/08/2006"The supermarkets in an attempt to defend themselves have actually made our point for us, in another newspaper they say that they uphold the principle of responsible retailing etc. But then go on to say that their research shows that the alcohol is for home consumption. I hate to tell Tesco's and Sainsbury's, that is the whole point, people are tanking up at home before going out, then seek out the cheap bars and then going on to decent pubs and clubs and causing trouble. So HMG Tesco and Sainsbury's have said it, now do something about it."

Belinda​ via email, 04/08/2006There really are people who think a ban will reduce DRINKING rates!! That's a new one. Not just people, but people with responsibility in government. Localities left without social amenities is an acceptable price to pay for a smoking ban and will result in less drinking?

Of course supermarkets will fill the gap ...

John Ellis, Crown Inn, Oakengates​ via email, 04/08/2006

2 or 3 drinks a week equals "Binge Drinking"? I don't think so, and neither would many other rational people - some of these so-called "Health Experts" really need to get a life!

What do we have to do to get some action taken on supermarkets which, during the World Cup, were dumping alcohol on the market at less than the cost of duty and V.A.T. If we responsible licencees tried that, we would be hauled up before the Courts. It must be against various laws but, more importantly, it is against the ethos of "Drink Responsibly". It's no good the Big Brewers" moaning that they can't stop the supermarkets loss-leading with beer - THEY CAN!! If someone distorts the market with your product, STOP SUPPLYING THEM!!