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UK: Asda, Innocent slash prices on juice, smoothies

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UK supermarket chain Asda has joined with Innocent drinks to cut prices on 100% juice and smoothies, in protest at high government tax on the products.

The price cuts, beginning today (9 September) and lasting for three weeks, were devised as a protest against high value added tax (VAT) on healthy food and drink, said Asda.

The Wal-Mart-owned retailer has called on the government to reduce VAT on smoothies and 100% juices from the current 17.5% to just 5%. It said authorities made GBP200m (US$356m) per year on the smoothie and juice tax.

Among the price cuts, a litre of Asda own-label, not from concentrate orange juice, will fall from GBP1.33 to GBP1.13. An Innocent strawberry and banana smoothie will cost GBP2.47 per litre, instead of GBP2.90.

Paul Kelly, Asda corporate affairs director, said: "By rolling back the price of all 100% fruit juices and smoothies, we're rewarding customers for choosing healthy products, instead of penalising them, as the current law does."

Innocent, which makes up around two thirds of the UK smoothie market, said it was looking to broaden the campaign.

"We've had discussions with government, and are now working with the British Soft Drinks Association and the British Retail Consortium to guarantee that a price reduction on all juices and smoothies will be passed on to consumers," said Innocent managing director Jamie Mitchell.

The Royal College of Nursing has also announced its support for the campaign.

Almost one in nine Asda customers surveyed considered fruit juices an essential item in their shopping baskets, the supermarket said.

Under UK government law, foods deemed essential items, such as fruit, meat and milk are not subject to VAT. So-called luxury items are taxed at 17.5%.

Smoothie sales by volume grew 44% in 2007, the largest rise in the soft drinks category, according to Britvic's annual report on sector. However, Nestle UK said last week that an economic slowdown had tipped the sector into decline this year.

 


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