Tesco boss defends alcohol promotions

By Matt Eley Matt

- Last updated on GMT

Related tags Tesco Alcoholic beverage

Ask licensees up and down the country what the biggest issues affecting them are, and you will be hit with a tirade. The beer tie, tax, the smoking...

Ask licensees up and down the country what the biggest issues affecting them are, and you will be hit with a tirade.

The beer tie, tax, the smoking ban, the weather - all of those will get a mention, but arguably the one that most will bring up is the low cost of booze in supermarkets.

This is why The Publican​ is calling for a minimum price of 50p per unit of alcohol in our Make it the Minimum​ campaign - to highlight the responsible prices pubs sell at and to try to bring an end to irresponsible deals in the off-trade.

As part of the campaign we contacted the big four supermarkets to give them the opportunity to explain their policies around alcohol retailing.

The first to put themselves in the firing line is supermarket behemoth Tesco, in the form of executive director for corporate and legal affairs Lucy Neville-Rolfe.

Unsurprisingly, she refutes suggestions that Tesco sells alcohol irresponsibly, but accepts that it is sold as a loss-leader. "We try not to sell alcohol at a loss and below-cost selling is not a sustainable way to do business," she tells The Publican​.

"You will from time to time get individual promotions and these tend to be on particular occasions when you have a very competitive climate, so you might have a big football game and then the different retailers are competing with one another.

"Long-term, we do not want below-cost selling and when the Competition Commission looked at this in one of many inquiries, they concluded it was best for consumers to decide, rather than to regulate against below-cost selling."

Ah yes, the competition inquiries. The pub industry could have one of its own to look forward to around the beer tie in the not-too-distant future. But Neville-Rolfe points out that during her dozen years at Tesco, supermarkets have already had three. This, she suggests, pours cold water on the notion that the government listens more closely to lobbying from supermarkets than it does to the pub trade.

In fact, one of those inquiries, into milk prices and farmers getting squeezed, is pinpointed as a reason why supermarkets are wary of increasing alcohol prices without government intervention.

Problems with pricing

Neville-Rolfe explains: "There was a slight hint from government that really we should get together as a sector - all the small shops, supermarkets and perhaps the British Retail Consortium - and ensure that prices were higher in the supermarkets.

"With my knowledge of three competition inquiries that would probably be against competition law because the effect would be to push the price up.

"This might or might not help to reduce problem drinking, but there would have been an ironic risk that competition authorities could have come after us for operating as a cartel to get the price up."

And perhaps more tellingly, she adds, if Tesco did go it alone on pricing, consumers would simply shop elsewhere.

"The difficulty we have found is where you do try to keep the price of alcohol up others cut price sharply against you," she says.

"What happens is customers go to the shop next door. So you actually don't benefit society - you end up hitting Tesco."

But surely she accepts that bargain basement prices are doing nothing to stem social problems around alcohol and can result in people "pre-loading" before heading to pubs?

"The Clubcard data we have actually suggests that people tend to buy bulk beer, bulk wine, bulk cider as part of a weekly shop and then use it through the week," she argues.

"We know that because then they don't buy it again for a while. So I don't think that is the root cause, if I'm honest, of binge-drinking.

"Obviously one can understand the frustration of the licensee, but I think there is consumer merit to special offers, particularly at the moment when people are feeling really hard-up."

No chance of prices going up any time soon then. But Neville-Rolfe is also keen to point out that while the prices can at times be low, Tesco takes responsible retailing seriously. It is involved with Challenge 25, Drinkaware and the industry-wide marketing initiative Project 10 - due to be launched later this year.

"To tackle the social issues you need a multi-faceted approach," she says. "So it's not only about price, it's about industry endeavour, it's about having the right sort of labels because people don't necessarily know about the units they are drinking.

"We test ourselves - are we compliant with our own rules? If anything we have been criticised for asking people who are really quite elderly for their ID." However, it would appear that this responsible retailing does not extend to support for a minimum price - despite evidence from Sheffield University showing a 50p-per-unit minimum would save 3,400 lives a year.

"That would be something that government would have to legislate for and all the parties have said they see problems with that," says Neville-Rolfe. "So it doesn't seem to me that it is a realistic option - and I think one has to look at other options."

Tesco is a business, and as such it is easy to understand that the plight of the pub trade does not feature on its list of concerns.

But it does come as something of a surprise when Neville-Rolfe suggests that supermarkets are actually helping pubs.

Over recent years the number of local beers sold in stores has increased, something Neville-Rolfe says benefits pubs rather than luring customers away.

"It's complementary because people develop a taste for things," she says.

"I have gone to pubs more myself, and with my family, since they have started serving a decent range of wines. I don't drink beer, I don't drink cider, so before it was basically water or orange juice.

"And since pubs started to offer a drinkable type of wine by the glass it has made a huge difference to me."

And one area where supermarkets and pubs both have to move forward is trying to satisfy increasing customer needs.

"The modern consumer is very demanding and all of us - small businesses, large businesses, pubs, shops - have to change to adapt to the very demanding modern consumer," she explains.

"The real key to success in our business is the staff serving the customer and that is so true in pubs too.

"If there are good people behind the bar you go back again, and maybe on your own because you will be given a welcome. That sort of thing makes a big difference."

Who would have thought it, tips for pubs from the top at Tesco? Well, every little helps.

Lucy Neville-Rolfe

Lucy Neville-Rolfe was appointed executive director, corporate and legal affairs of Tesco in December 2006.

She joined Tesco in 1997 as group director of corporate affairs and from 2004 - 2006 was also company secretary.

Her responsibilities include community, government, legal, pensions, communications and competition matters.

Until 1997 she worked in a number of government departments. From 1995-97 she was director of the deregulation unit.

Prior to that she was a member of the Prime Ministers policy unit.

She started her career at for the Department for Environment, Food and Rural Affairs (DEFRA).

She is also deputy chairwoman of the British Retail Consortium.Make it the Minimum

The Publican's ​campaign Make it the Minimum is calling for a minimum price of 50p per unit of alcohol sold. Sign our online petition​ and find out more about the campaign at Make it the Minimum

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