The government has shelved plans to introduce a minimum price for a unit of alcohol in England and Wales, but it will ban below cost selling next year.

Home Office minister Jeremy Browne said the unit pricing policy would remain “under consideration” but said there were fears the change would hit responsible drinkers. A ban on multi-buy sales has also been rejected.

Browne said there was not enough “concrete evidence” a unit pricing policy could reduce the harmful effects of problem drinking without hurting those who drank responsibly.

“We are not in the business of making laws that do not work,” he said.

The minister said 34% of those who responded backed a 45p minimum unit price - but 56% had disagreed. He added: “We consulted on it and we heard what people say.”

But he said banning sales of alcohol below the cost of duty and VAT would mean a can of lager could not be sold for less than about 40p from spring 2014.

The Federation of Wholesale Distributors, whose members include Palmer and Harvey and Booker, said the ban on below-cost selling of alcohol would help to prevent irresponsible discounts by large retailers and encourage competition in the grocery market.

However, it called on the Government to go further and include the costs of manufacturing, distribution and promotion in its assessment of below cost, which is currently defined as just the duty due on the product and VAT.

“Aggressive below cost alcohol price promotions by multiple chain supermarkets undermine the competiveness of the overall grocery market and therefore have an adverse effect on consumer choice,” said FWD chief executive James Bielby.

“There is also strong anecdotal evidence that the sale of below cost alcohol has knock-on effects on public health, as people are able to buy products at excessively low prices. It also encourages smaller retailers to buy duty-avoided stock from criminals in order to compete on price.

“While we support this move, a definition based solely on duty and VAT is not realistic and will not cover sufficiently the promotions that are of political concern. We will continue to make the case for a more workable definition which will make a real difference to the way alcohol is sold in supermarkets.”