Officials eye tougher action on off-trade alcohol

This is despite the Home Office coming out in favour of banning sales of alcohol below duty and VAT, with no production costs included, in January.

Any action to include the cost of production would be welcome by the on-trade, which complained that the duty + VAT definition would not stop the cheapest deals in supermarkets. Cans of lager could still be sold for 38p under this definition, for example.

A well-placed source said: “They are looking to do something that goes beyond duty plus VAT, but I think they are finding it increasingly difficult to come up with something that included the cost of production. Legally that’s a minefield.”

Concerns had been raised in the past about the difficulty of including production costs because of the multitude of different variables for different producers. There are also fears about releasing sensitive information.

A Home Office spokeswoman said legislation bringing forward a below-cost ban is due by the end of the year, with implementation planned for 2012. She said the definition would be duty plus VAT “and nothing else at this stage”.