UK: Tesco call for mandatory price rises welcomed
The drinks industry in the UK has cautiously welcomed Tesco's call for a ban on the sale of cut-price alcohol in the country's off-trade.
The supermarket chain confirmed today (21 February) that it supports the introduction of legislation to "ensure responsible pricing of alcohol among off-trade retailers" in the UK. While competition law in the UK prevents retailers discussing prices together, Tesco has called for the Government to lead the way, adding that it would support a mandatory rise in prices.
The announcement has been seen by observers as pre-empting the results of a governmental investigation into the effect of cheap off-trade alcohol sales, set to be unveiled in April.
A spokesperson for the Wine & Spirit Trade Association in the UK said: "Our view is that price and promotion is not the real issue in terms of alcohol misuse - surely countries like France and Spain with much cheaper alcohol would have similar problems if it was.
"But it makes sense to at least have a discussion about these issues. If that's to happen, the Government has to address the competition law barrier."
Similarly, Diageo said: "While there is no evidence to suggest a direct correlation between price, promotion and alcohol harm, there is a perception that it plays a part and this needs to be addressed.
"Just as Tesco has recognised that competition law prevents it from discussing price, it also prevents suppliers like Diageo from controlling the price at which its brands are sold."
Alistair Darling, the Chancellor of the Exchequer, will announce his budget next month, with speculation mounting that alcohol duty will be increased markedly.
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