The move will be disappointing for the pub industry, which has been campaigning for a ban on the below-cost sale of alcohol – a manifesto commitment originally set out by the coalition government.
According to CAMRA, the law will still allow supermarkets to offer cheap alcohol, while red tape and tax pressures on pubs continue to drive up the price of beer to £3 per pint.
“Today’s decision means pubs will continue to close as they are undercut by supermarkets selling canned beers at pocket money prices,” said Mike Benner, chief executive of CAMRA. “A ban on selling beer at below duty plus VAT will have a negligible impact as supermarkets sell only a tiny proportion of beer at below these levels.
“The Government appear all too ready to impose higher costs and regulations on well-run community pubs but are prepared to turn a blind eye to the irresponsible attitude towards alcohol expressed by the supermarkets.”
Tackling crime
A statement from the Home Office today explained how the Government hoped the new regulation would help tackle the link between alcohol and crime disorder, namely the consumer habit of “pre-loading”.
It said: “As part of our consideration of how to deliver the coalition commitment to deliver a ban on below cost sales, the Home Office and Treasury have carried out respective reviews of alcohol pricing and taxation. These confirmed a consensus that pricing controls can be an effective way of both improving public health and reducing violent crime.
“Banning the sale of alcohol below the rate of duty plus VAT is the best starting point for tackling the availability of cheap alcohol and will send a clear signal to retailers and the public that Government takes this issue seriously.
“It will effectively set a minimum level below which alcoholic products cannot be sold and will stop the worst instances of deep discounting which result in alcohol being sold both cheaply and harmfully. Importantly this system will have a limited burden on business and can be delivered at low cost to the taxpayer.
“We intend to take forward measures to deliver this commitment without delay subject to the Government’s regulatory assessment and clearance process.”
CAMRA added that a ground floor price of 40p per unit would be required to prevent supermarkets from selling alcohol at a loss. However the new regulation would allow supermarkets to sell for a minimum of 21p per unit.
Freeze beer duty
Brigid Simmonds, chief executive of the British Beer and Pub Association, said: “This is a clear measure that can be implemented quickly and will stamp out the worst cases of below-cost selling. However, it will not have a significant impact on low-priced alcohol in supermarkets. With 70 per cent of alcohol now sold in the off-trade, there is a real need for the Government to do more to support the pub.
She added that the Government would need to freeze beer duty in March’s budget if it wanted to save 10,500 jobs in the pub industry.