Morrisons supports below cost sales ban

Morrisons supports below cost sales ban

Supermarket chain Morrisons has become the latest company to call for a base price on alcoholic drinks in the UK.

Morrisons said today (10 June) that it would support a Government bill to ban sales of alcohol at prices below the cost of duty tax and value added tax (VAT).

This, said the supermarket chain, would be the most effective way of forcing up alcohol prices in the off-trade without hurting competition.

Its announcement is in-line with industry trade body the Wine & Spirit Trade Association (WSTA), which has said it will support any Government proposal to ban drinks sales below the cost of duty tax and VAT.

The UK's Coalition Government has proposed a ban on 'below cost' sales of alcohol, but the finer details of how this might work are thought to be up for discussion.

"Morrisons does not sell alcohol below duty + VAT," said Richard Taylor, Morrisons' head of corporate affairs.

"We believe that this mechanism, if enshrined in law, would provide an immediate and fair approach to stem the misuse of alcohol. If the Government thinks that the price needs to be raised, it can do so with confidence by raising duty and ensuring the money goes to the Exchequer.," said Taylor.

Duty tax and VAT on a typical litre of continental lager is currently GBP1.02, Morrisons said.

The supermarket warned that any attempt to introduce a minimum price per alcohol unit, or to widen parameters for below cost selling beyond duty and VAT, would hit both legal and practical barriers.

Rival supermarket Tesco has come out in support of a minimum price on drinks, as have several brewers, including Molson Coors and C&C Group.

However, the Conservative Party, which dominates the Coalition Government, has consistently opposed a minimum unit price on drinks and no proposal for this has been put forward.

Drinks industry leaders expect the Government to move quickly to act on alcohol-related harm in order to show that it is serious about the issue. The Government will unveil its Budget on 22 June.