Off-trade set for minimum price windfall

By Ewan Turney

- Last updated on GMT

Related tags: Minimum price, Tax, Tesco

Supermarkets: will cash in on a minimum price
Supermarkets: will cash in on a minimum price
Supermarkets, such as Tesco and Asda, would net an extra £700m if a minimum price of 45p a unit was introduced across the UK. That's according to...

Supermarkets, such as Tesco and Asda, would net an extra £700m if a minimum price of 45p a unit was introduced across the UK.

That's according to the Institute for Fiscal Studies (IFS), which believes that a minimum price on alcohol would do little to benefit the public purse and would simply add to the coffers of the large supermarkets.

Tesco would stand to be the main benefactor of a minimum price to the tune of £230m, followed by Sainsbury and Asda. Earlier this year, Tesco said it would be in favour of a ban on below cost sales of alcohol.

In relative terms, discount supermarkets such as Lidl and Aldi, would also be big beneficiaries as they sell alcohol most cheaply.

Tax on units

Researchers said that the Government should lobby the European Union for more flexibility on the taxation of alcohol and suggested a tax on the number of units in a drink to "mimic" a minimum price scheme.

This is currently possible for beer and spirits but not for wine and cider.

"In the long-term, it would be desirable to restructure alcohol taxes so that they were based on alcohol strength, thus allowing the tax system to mimic the impact of a minimum price but ensuring the additional revenues went to the Government rather than firms," said IFS senior research author Andrew Leicester.

Much-needed revenue

"Minimum alcohol prices would transfer large sums from consumers to those firms that retail and produce alcohol, but may target households that consume the most alcohol more directly than increases in alcohol taxes.

"However, higher taxes would generate much-needed revenue."

Last week, the Scottish Health Committee voted for a Conservative ammendment to the Alcohol Bill to scrap minimum pricing.

Related topics: Legislation

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