Fresh fears coalition will fudge below-cost ban

By James Wilmore

- Last updated on GMT

Related tags Excise Supermarket

Fears are increasing the government's much-touted below-cost ban on alcohol will have zero impact on cut-price supermarket deals. Government...

Fears are increasing the government's much-touted below-cost ban on alcohol will have zero impact on cut-price supermarket deals.

Government officials, it is understood, have indicated that below-cost will be defined as duty plus VAT - which will not affect off-trade prices.

One Tory MP told The Publican​ a definition of duty plus VAT would be a "pointless exercise" that would attract "derision" from the public.

The below-cost ban has already been delayed after being left out of the Police Reform and Social Responsibility Bill - which includes a major shake-up of the licensing regime.

An announcement on plans for the ban, part of the coalition agreement, are expected either later this month or early February.

Brigid Simmonds, chief executive of the British Beer & Pub Association, told a meeting in Parliament yesterday: "Our understanding is it will be duty plus VAT. Frankly that will not make a change to the way supermarkets sell it (alcohol)."

It is understood government officials have realised there will be major difficulties over adding to the formula of duty plus VAT.

One industry source said: "Anything additional to duty plus VAT could get close to being a minimum price, which would then face serious legal difficulties."

A watered down version of the ban would be a major blow to licensees hoping for an end to irresponsible off-trade deals.

Tory MP Andrew Griffiths, who has tabled a parliamentary motion on the issue which has attracted 101 MP signatures, said: "I have made representations to the minister that it will be a pointless exercise to define it as duty plus VAT. Using alcohol as a loss-leader is a dangerous exercise and sends out the wrong message."

Kate Nicholls, strategic affairs director at the Association of Licensed Multiple Retailers, said it would be "extremely disappointing" if the proposal was just duty plus VAT.

"It would be a complete dereliction of duty by the coalition government, which promised a ban on below-cost sales," she said.

But Gavin Partington, head of communications at the Wine and Spirit Trade Association, said: "Duty plus VAT is the most practical way to bring in a ban because both excise duty and VAT are consumers taxes that should be paid by the consumer."

A Home Office spokesman told The Publican​: "The government is committed to taking forward proposals to implement the ban on sales below cost without delay. We will make an announcement soon."

Related topics Licensing law

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