WSTA: duty plus VAT is right definition of below cost

The Wine & Spirit Trade Association has told the Government the only sensible definition of below cost is duty plus VAT.

The WSTA used the licensing consultation to further press its claims that that any ban on below cost sales of alcohol in supermarkets must be defined as a combination of the two taxes.

The call is widely unpopular in the pub trade as it does not take in to consideration the cost of production or marketing and is therefore unlikely to make a significant impact on the price of alcohol in supermarkets.

The organisation also stressed any below cost ban must be set on a national basis.

"The WSTA supports a ban on selling alcohol below the level of 'duty plus VAT' on the basis that these are both consumer taxes and therefore the cost should be passed on to the consumer," it said.

"The Association is working with Government on a transparent and fair definition of cost but believes this aspect of the licensing consultation must be applied nationally if it is to meet the needs of consumers and businesses."

Jeremy Beadles, WSTA chief executive, said: "It is clear that any initiative to address below cost selling must be agreed nationally if it is to work effectively.

"A system that produced different price restrictions in different areas would cause confusion for consumers and chaos for businesses."