Government considers four options for alcohol pricing

The Government has put forward four options to ban below-cost selling of alcohol and is understood to be preparing for a public consultation on the proposals within weeks.

The coalition pledged in June to ban below-cost alcohol sales and has held talks with retailers to define what it means by "cost".

The Grocer magazine said the Home Office told industry lobbyists it was working on four possible options, the first of which defines cost as simply duty and VAT.

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This is the definition used by leading supermarket chains, including Bradford-based Morrisons, which last month called on the Government to ban the sale of alcohol below this figure.

Many in the industry object, however, to the definition on the grounds it would only affect the deepest discounts and attributes no cost to the product itself.

Two other options were to add some form of cost for the production, distribution and marketing of the product, or to ban sales below the cost of the invoice sent to retailers.

The fourth option was to allow retailers to work together on fair pricing without fear of prosecution under competition law. A minimum cost per unit had been ruled out, the Grocer said, although this is still expected to be accepted in Scotland.

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Carlsberg UK chief executive Isaac Sheps told the magazine: "If you go only on duty and VAT, it's easier to control because this is a number nobody can mess with." but Mark Hunter, chief executive of brewer Molson Coors, said the cost of production needed to be included if the law was to have any impact.

The four options would be presented in a consultation document in early August

Chris Sorek, chief executive of charity Drinkaware, said tackling alcohol misuse in the UK would require a range of measures. Price alone would not solve the binge-drinking problem.