Minimum pricing would hit off-trade revenues

A new report has blown a hole in the idea that a minimum price would boost supermarket profits by around £710m a year.

The report, commissioned by Greene King, found a minimum price of 45p a unit would actually see supermarket revenues fall by up to £1.2bn a year due to falling demand.

A previous report by the Institute of Fiscal Studies suggested a 45p minimum price would boost off-trade profits by around £710m a year.

But FTI Consulting, which produced the new analysis, has used HMRC figures on price elasticity to argue the rise in off-trade alcohol prices would dampen demand - and cost shops between £590m and £1.2bn a year in lost revenues.

Off the back of the report, Greene King said it "remains committed" to minimum pricing as the most effective way to "curb excessive drinking".

It argues banning below-cost sales would not go far enough and hiking taxes is a "blunt instrument" and would not tackle the problem.

In a statement, the company said: "The core problem lies with a minority of people purchasing cheap booze from off licences and supermarkets and so using tax as a method to address this would penalise further community pubs and responsible drinkers, which are not part of the problem.

"A minimum price, however, would go right to the heart of the issue, targeting easily available alcohol sold at pocket money prices."

It added: "The minimum pricing debate needs to continue and, along with other targeted measures, should be factored into the UK Treasury's current review of alcohol taxation and pricing."