World Cup cut-price frenzy

The World Cup has given supermarkets a perfect excuse to sell booze even cheaper

There's an old saying that the newspaper being read by the person sitting next you is always more interesting than the one you've bought. That was the case when I spotted a headline about "Supermarket alcohol price war", in the paper being read by my neighbour on the train.

Fortunately his paper was a free sheet, which he kindly left behind when he got off the train, so I was able to read the accompanying article. The text made my blood boil and my hair curl at the same time: supermarkets have that effect on me.

As expected, as the football World Cup approaches, the supermarkets are packing their shelves and aisles with cheap booze. But the word "cheap" takes on a new meaning, as the discounts for this World Cup make previous offers seem wildly inflationary. The director of a wholesale company told the newspaper that, with more than 30 years' experience of the trade, he had "never seen anything like the deep discounting by Asda and Tesco".

The most revealing aspect of that quote is that the director in question preferred to remain anonymous. Clearly he doesn't want the heavy mob coming round and smashing his headlights. What a terrifying world we live in when giant supermarkets create a climate of fear for their suppliers.

Asda has launched a £9 deal for 20 cans of 440ml Stella Artois. The group already sells 20 packs of Carlsberg Export, Budweiser and Carling at the same price. Asda is undercutting Tesco, which is selling same-size packs of those brands for £10 each.

The anonymous director said: "There are still two months before the World Cup, so it will probably lead to deals of two crates for £16 by the time it starts. All the talk of 'responsible retailing' is nonsense and will heap more pressure on pubs."

Dennis Griffiths, president of the Federation of Licensed Victuallers Associations, was prepared to put his head above the parapet. He described the supermarket discounts as "absolutely ridiculous" and accused them of killing the pub trade.

He added: "Every time something like the World Cup comes around, they run promotions like this. It's not responsible, it's against everything the Government stands for, yet somehow they get away with it. On the same day Alistair Darling increased duty yet again [in the 2010 Budget] the supermarkets reacted by dropping the price of alcohol."

Not a priority​

Observant readers will note that Mr Griffiths was speaking before last week's General Election. At the time of writing, there is no Government and one thing is certain: if some kind of coalition or minority regime takes over, the supermarkets will not be high on its list of priorities.

It's one of the curiosities of modern life that Governments nationalise failing banks and remove the franchises from incompetent train operators. But the supermarkets are untouchable, inviolate. Why is it that Government ministers of any stripe walk in fear of Terry Leahy, the boss of Tesco?

Politicians of all parties made much play of their support for community pubs during the election campaign. Nick Clegg — remember him? He was briefly popular — signed up, hook, line and sinker, for the Campaign for Real Ale's policy on how to save local pubs.

Yet as soon as they are in office, political parties go ashen-faced at the thought of tackling the power of the supermarkets. They have the muscle to wring not only deep discounts from brewers, but threaten to close down suppliers who don't toe the line.

To borrow the famous comment by Edward Heath when he was prime minister, the supermarkets are "the unpleasant and unacceptable face of capitalism". They are prepared to see community pubs go to the wall in their obscene dash for market share and ever-higher profits. What do they care if 30 pubs a week close as long as the tills go on merrily trilling in Asda and Tesco stores?

The supermarkets are in effect selling beer at around 45p a pint. Pubs, with high overheads and beer supplied at top-dollar prices, are being driven to the wall by giveaway prices in the off-trade.

Molson Coors, owner of Carling, complained recently that it makes only a penny per pint profit on the beer. The reason is simple: the group is prepared to sell beer to supermarkets at just a fraction above the costs of production.

It's the economics of the loony bin. Not only will more pubs close, driven out of business by off-trade discounts, but there's also the possibility that one of the global brewers that dominate beer production will decide the game's not worth the candle and pull out from Britain.

When we do have an effective Government again, will it be prepared to tackle the supermarkets and look at some form of minimum pricing? Don't hold your breath.