Molson Coors pushes government on below cost ban

Brewing giant Molson Coors has urged the government to reveal how it plans to tackle the issue of below cost selling.

As expected the government did not include its method as it revealed its plans for alcohol tax reform and changes to the licensing laws this week.

Instead it is now anticipated that a below cost ban will only come into force in May 2012 after the Home Office opted not to include it in the Police Reform and Social Responsibility Bill, published today.

Mark Hunter, chief executive of the Carling brewer, said it was keen to hear more details on the plans.

He said: "We are also eager to hear detail on the methodology by which the government intends to ban below cost selling which we believe must be grounded in realism. Tax is not a proxy for cost and there is a significant difference between a ban on below cost selling and the ban on below tax selling.

"We believe that a ban on below tax selling will not address problem prices and might even drive prices lower - contradicting the bill's purpose.

"We continue to believe that a ban on below cost selling where cost is defined as a nominal cost of production would tackle problem prices. This method has advantages of addressing key policy issues, being enforceable, and providing a realistic solution that is easier to administer than other policy solutions.

"While we support the intent of a ban on below cost selling that defines cost by net invoice, the concept has a number of challenges around implementation and commercial confidentiality that would make it unwieldy and difficult to police."