Every little helps – Tesco and booze

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Posted by: Sue Atkins

Every little helps – Tesco, booze and binge drinking

I was fascinated to listen to the lovely Jeremy Vine talking today on BBC Radio 2  to the very enthusiastic chap from Tesco about their support of the government’s proposals to curb binge drinking and rowdy behaviour.

Britain’s biggest supermarket Tesco said it supports the U.K. government’s plan to ban the sale of alcohol at prices below cost, in response to proposals designed to curb binge drinking and rowdy behaviour.

Tesco PLC, the country’s biggest retailer by market share, also said it would support any government move to set minimum prices on beer, wine, alcoholic cider and spirits—a measure that has been much-debated in the U.K., but not explicitly proposed by the country’s new coalition government.

The U.K. has been struggling with a rise in alcohol consumption that many people contend is fueling public disorder and violence. Health experts say cheap supermarket alcohol, irresponsible barroom promotions and longer pub opening hours have contributed to the problem. Binge-drinking became an issue during the election campaign, with all the parties vowing to crack down.

The government this week said it would take a range of steps to curb alcohol abuse, including banning below-cost sales; giving police stronger powers to yank licenses from pubs that over-serve customers; and allowing local councils to permanently close any shop or bar “persistently selling alcohol to children.”

In a nod to the coalition’s junior party, the Liberal Democrats, who support setting minimum prices on alcohol, the government also said it would “review alcohol taxation and pricing to ensure it tackles binge drinking without unfairly penalizing responsible drinkers, pubs and important local industries.”

Tesco’s backing of minimum prices sets it apart from other retailers and alcoholic beverage companies, which have generally opposed the idea. Brewing giant SABMiller on Friday said it opposes minimum pricing because it is unlikely to curb binge drinking and would unfairly penalize responsible drinkers.

J Sainsbury PLC, the U.K. supermarket chain, also opposed the idea. “There is no reliable evidence that minimum pricing would tackle the problem of binge drinking,” the company said in a statement. Sainsburys does not sell alcohol at below-cost prices and therefore does not support a ban on the practice, the company added.

A 2007 U.K. Competition Commission report found that most of the U.K.’s big supermarkets, including Sainsburys, Tesco, ASDA and Morrisons, sold alcohol below cost during the 2006 World Cup.

Health experts on Friday said they doubted the government would actually adopt minimum prices, however, in part because the dominant Conservative Party has never supported the idea.

“We don’t know the level at which price encourages problem drinking, so any pricing controls will have to be carefully debated to make sure they are effective and proportionate,” Tesco CEO Terry Leahy wrote in an opinion piece published Friday in the U.K.’s Daily Telegraph newspaper, adding that ineffective measures would make consumers pay more for no good reason.

“But common sense tells us that price is a factor in excessive drinking, and this is supported by the fact that more than half of the customers we talked to in our research believed the availability of cheap alcohol contributed significantly to the problem,” he said.

Andrew Misell, policy manager at Alcohol Concern, a U.K. group attempting to combat alcohol abuse, called the planned ban on below-cost selling a good first step, but said it won’t necessarily boost prices much. That’s because supermarkets drive hard bargains with alcohol sellers, and can still make a slim profit at rock-bottom prices, he said. Minimum pricing would be a better solution, he said.”

Written by JEANNE WHALEN And PAUL SONNE from The Wall Street Journal

So what are your thoughts?

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