Tesco move to raise alcohol prices welcomed by trade

Tesco's proposal to ban alcohol promotions has been welcomed by the pub trade and campaigners alike - and thrown down the gauntlet to other supermarkets to follow suit.

But the supermarket giant, which is calling on the government to legislate on the issue, has faced criticism for not going ahead and raising prices under its own steam.

There was also a suggestion that Tesco's announcement on Wednesday night had been timed to pre-empt new calls for action from the British Medical Association (BMA) today.

Tesco's extraordinary move comes after months of pressure on supermarkets to do something about the rock-bottom alcohol prices which many fear have been fuelling binge-drinking.

Within hours other supermarkets were pledging action of their own, with Asda claiming it would be announcing measures this week. Sainsbury's and Morrisons, the other 'big four' supermarkets, are still formulating their responses.

Labour MP and anti-supermarket campaigner John Grogan said Tesco's move was no surprise.

"Clearly Tesco is buckling under the pressure, and that has to be welcomed," he said. "But there's nothing to stop it taking a stand unilaterally today and I'm sure its major competitors would follow suit if it did. It's now up to the government to respond."

Grogan added a response was most likely to come in April, when an independent review of alcohol pricing is due to be published.

Rob Hayward, chief executive of the British Beer & Pub Association, said: "We hope all supermarkets will follow Tesco's lead in making clear their opposition to irresponsible pricing, and we hope the others will indicate their intentions in this area."

But Association of Licensed Multiple Retailers chief executive Nick Bish said Tesco had "ducked its responsibility" by not taking immediate action.

"Tesco has finally woken up and realised that it is partly to blame for the nation's collective hangover," he said. "There is nothing to stop Tesco from unilaterally taking action to ban below-cost selling in its outlets."

Tesco called on ministers to begin discussions on legislation to ensure responsible alcohol pricing as soon as possible.

Corporate and legal affairs director Lucy Neville-Rolfe said: "Competition law prevents businesses discussing anything to do with price with each other and imposes severe penalties on anyone who breaches it.

"The only safe solution is for the government to initiate and lead those discussions and to bring forward legislative proposals which Tesco and others in our industry can support."

She added that Tesco was also looking to develop a more responsible approach to licensing hours, by not seeking licences in troubled areas and by reviewing existing licences where late-night alcohol sales are causing problems.

A spokesperson for the Department for Business, Enterprise and Regulatory Reform said Tesco was right to say it would be illegal to agree with competitors to put up alcohol prices.

"The government is considering whether further action would be effective to deal with problems related to alcohol abuse," he added.