Cheap supermarket booze given all clear
The Competition Commission has cleared supermarkets of any wrongdoing in selling alcohol below cost.
The result comes as no shock as it had been widely reported back in September but it is nevertheless disappointing for pubs struggling to cope with the cheap and irresponsible booze deals on offer.
Pubs will also not be pleased to hear the inquiry has recommended a change in planning laws to allow more supermarkets to be built to provide consumers with more choice in certain areas.
The inquiry's provisional report was published this morning. The 18-month inquiry into the groceries market has ruled out a ban on selling alcohol as a loss-leader.
Small retailers and suppliers are being squeezed out because of practices such as selling items below the cost of productionMatthew KnowlesFSB
It said: "Below-cost selling by national retailers is not part of a predatory strategy aimed at convenience stores or specialist stores and is not having significant unintended effects on smaller stores."
All hopes now rest with the Government's inquiry into alcohol pricing and promotions, which is expected to kick off in October and report by April 2008.
The news comes as supermarkets are set to slash the price of alcohol to unprecedented levels this Christmas due to poor summer sales.
Although the result is a disappointment for the trade, the inquiry has helped intensify the pressure on the supermarkets and brought the fight into the public eye.
Evidence given revealed that the big four - Sainsbury's, Tesco, Asda and Morrisons - sold £112.7m of beer, wines and spirits below cost in the World Cup period last year.
The Federation of Small Businesses slammed the report as "missing the point entirely".
Matthew Knowles, of the FSB, said: "This is the third inquiry in seven years but sadly it is not third time lucky. The devastating impact of the current unfair grocery market can be seen on high streets across the country.
"Competition is about consumer choice as well as price and it does not matter how cheap mainstream items are at a supermarket if the only outlets for other goods have closed down.
"Small retailers and suppliers are being squeezed out because of practices such as selling items below the cost of production and bullying suppliers."
The final report is due to be published in March 2008.
