The government has missed an opportunity to impose a realistic ban on the sale of below-cost alcohol, as the definition of the cost of alcoholic drinks announced last month will do nothing to prevent the very cheap supermarket promotions that such a ban is intended to address, says the FWD.
The proposed policy will reinforce the lack of competitiveness in the grocery market in favour of supermarkets which, due to their size, are able to offer alcohol at low prices.
Smaller wholesalers and retailers may turn to the grey market to enable them to compete with the aggressive cheap alcohol price promotions available in larger stores.
In its Coalition Agreement the government pledged to ban the sale of below-cost alcohol, but the definition it has put forward is based solely on VAT and duty. FWD, along with the Association of Convenience Stores, has made the case for production, marketing and distribution costs to be included in the calculation.
FWD chief executive James Bielby said: "We are disappointed that Ministers have chosen not to adopt a more realistic model that reflects the true cost of putting alcoholic products on the shelf. Aggressive below-cost price promotions by supermarkets have an adverse effect on FWD members and their customers."