Christmas is naturally a time when alcohol retailers, pubs and restaurants do well but it is also a time of aggressive price promotion among retailers. Chris Losh bemoans the damage being done to the wine trade by aggressive discounting in the off-trade and asks why price promotion becomes even more frenzied at Christmas when even in a downturn the market will be relatively buoyant.

There's a great scene in the film Something About Mary where Ben Stiller picks up a faintly unhinged hitchhiker who insists on telling him all about his great new business scheme. Ever so slightly inspired by the hugely successful fitness video 'Eight Minute Abs', the hitcher's surefire winning idea is, er, Seven Minute Abs.

"Think about it, man," he says. "Walk into a video store and there's Eight Minute Abs sitting there and Seven Minute Abs sitting right beside it... Which one you gonna pick?"

The flimsiness of the proposition is exposed by Ben Stiller's character, who says that he'd pick the Seven Minute video... but only if a competitor hadn't brought out a Six Minute Abs version.

The hitcher is unimpressed. "Who works out in six minutes?" he trills madly. "Seven is the key number. Think about it. Seven-Elevens, Seven dwarves... Seven's the number."

Now, why am I throwing film dialogue at you rather than drivelling on about exchange rates, grape prices etc? Firstly, because the above exchange is a great illustration of what happens when an  entire business strategy is based solely on number-chasing rather than a genuine concept; and secondly because the very illogical absurdity that makes it so amusing is, incredibly, finding its way into the wine world. Where, of course, it's a lot less funny.

Britain's retailers, sadly, are engaged in a price cutting war that, frankly, flies in the face of economic reality.

One retailer manages (don't ask me how) to sell three bottles of wine for GBP10 (Eight Minute Abs). So another comes in with a 'Seven Minute' range of wines at GBP3 a bottle. How long before we're at 4 for GBP10, or 3 for GBP8? Six, Five or Four Minute Abs?

These are the prices of the madhouse, and it's no wonder that the response of a punch-drunk trade has been either hysterical laughter or a stupefied silence.

There's been a lot of talk recently about the herd mentality: the tendency of human beings, whether City traders or consumers, to follow those around them. 'It only takes one steer to panic...' is a favourite line. But this kind of behaviour is not so much bovine as lemming-like: the retailers are leading the British drinks trade off a cliff.

How do we know this? Because the usual trade channels have broken down. I know of several influential wine buyers for restaurant groups who have been considering buying (or have actually bought) stock (particularly Champagne) from the supermarket, rather than their usual importer because the retail prices have been slashed so heavily.

Likewise, one employee at Jacob's Creek told me that workers at Pernod Ricard in the UK found it was cheaper to buy the standard brand from the local supermarket than at the staff shop. Since the staff shop sells it at cost you can draw your own conclusions about the pricing strategy of the supermarket chain - and whether its reduction had been sanctioned by the brand owner...

It is, of course, illogical enough to price promote at all in the run up to Christmas: it's the one time of year when members of the public are going to buy alcohol in any case, so why not use it as an opportunity actually to make some money rather than just shift volume?

How much more insane is it to price promote at or below cost price, causing the entire structure of the trade to implode as a result? Importers are already finding it tough going trying to collect debts from customers who they fear might be on the verge of bankruptcy; to lose supply business to supermarkets is the final insult.

The Government could, of course, step in to restrict, ban - or at the very least scrutinise more closely - the off-trade's promotional activity. Yet instead it prefers to prove its anti-binge drinking credentials by beating areas of the trade that are already hurting, and by repeatedly raising duty.

That price promotions are no longer permissible in bars and pubs (which are closing in record numbers) while supermarkets are happily selling alcohol at a loss in pursuit of footfall is positively Swiftian in the grotesqueness of its irony.

And putting up duty will achieve nothing apart from driving all but the huge retailers out of business.

Ask anyone in the Government about this and they will parrot back the mantra that they're all for business enterprise. The mass retailers would doubtless agree. The little guys may beg to differ.