Supermarkets fail to defend themselves over loss-leading alcohol

The Big four supermarkets failed to defend themselves against accusations of loss-leading with alcohol when grilled by top-level MPs at the House of Commons.

Despite being asked on several occasions by John Grogan, chairman of the All-Party Parliamentary Beer Group, representatives of Tesco, Sainsbury's, Asda and Morrisons refused to concede that they sold alcohol below cost price in order to drive footfall.

Nick Grant, head of legal affairs for Sainsbury's, described claims that binge-drinkers stocked up on cheap booze from supermarkets as "complete nonsense". He added: "You are talking about families buying alcohol as part of their weekly shop on a Saturday afternoon. Do you seriously think they will go home and drink it all at once?"

Mr Grant also said that loss-leading was an "extremely complex issue" and attempts to stamp it out altogether would be "impossible to police and an accountancy nightmare".

However, Jeff Ennis, MP for Barnsley East & Mexborough, was unimpressed with such dismissals. "I wouldn't expect supermarkets to just start hiking their prices, but using alcohol as a loss-leader is something I find difficult to defend," he said.

Linda Gilroy, MP for Plymouth Sutton, told the committee she had received many complaints from licensees in her constituency that they were dealing with increasing numbers of customers in their pubs who were already drunk from getting "tanked up" on cheap alcohol bought from the supermarket.

"I can assure you all that this does happen in Plymouth city centre and I will gladly take you out around my constituency to show you," she said.

Bernard Hughes, head of government affairs at Asda, denied this practice took place and criticised the focus of Mr Grogan's Early Day Motion on this issue, which has gained 188 signatures in Parliament.

He said: "I do not accept that people are getting tanked up on beer bought in supermarkets and creating problems in town centres.

"We will not put our prices up. Your constituents would not vote for higher beer prices this Christmas."

Meanwhile, Mr Grogan has vowed to press on with his lobbying on this issue - he announced at the start of the meeting that he would be making representations to both the Department of Health and the Home Office over the next month.