We need to pull in the same direction

04 May, 2007

Supermarkets won't allow themselves to

become panto villains, says Rebecca Evan


Four figures shuffled into an airless room. As they filed in, glancing at the watching crowd and preparing to defend themselves, the gathered masses eyed them for signs of sin. They sounded normal, looked normal and there were certainly no horns sprouting from their well-groomed heads. Yet, between them, the four stood accused of fuelling Booze

Britain, a once-pleasant land now full of chundering chavs, legless ladettes and Stella-swilling spinsters.

Anti-supermarket hype whipped up by some parts of the media and on-trade culminated in a big House of Commons showdown last month. Asda, Morrisons, Sainsbury's and Tesco sent their heads of legal or public affairs to give evidence to, and answer questions from, politicians and brewers in a meeting organised by John Grogan MP.

The problem for the politicians who have signed up to Grogan's Early Day Motion to end supermarkets' "irresponsible" drinks promotions is that the various arguments are flawed.

The first part of the EDM says "this House believes that the substantial price differential between alcohol sold in pubs and that sold in the off-trade is exacerbating the problem of binge drinking". But there is a reason for the price differential - most punters go to the pub for a number of reasons and not just to down drink. Pubs provide friendship, personal service and a sense of community but must also pay for staffing and overheads.

Where's the proof?

The continuing sales shift from the on- to the off-trade is clearly a big concern to pub companies, and likely to be one of the major prompts behind this EDM, but is the off-trade the right target for their concerns? The UK has changed since pubs were regularly packed with men enjoying a few pints while the wife cooked dinner. Society in the UK is "egg-shaped", with an ever-growing middle class who have more of an interest in entertaining - and drinking - at home.

As for cheap alcohol promotions leading to binge drinking - where's the proof? As Sainsbury's head of legal affairs Nick Grant said: "These are families buying alcohol for a week. Do you think people buy it to down it all at once?"

At the meeting, Plymouth Sutton MP Linda Gilroy said publicans in her constituency reported people "getting tanked up before they go out, on cheap booze from the supermarkets". This is not a new criticism, but again, where is the proof? Anyone working in a pub has not got the time to question every customer and, in any case, they should not be serving pie-eyed punters.

Gilroy called for legislation to "level the playing field" between the on- and off-trades, but was vague when questioned by Sainsbury's Grant about what sort of law she wanted.

Grogan's Early Day Motion also "urges supermarkets and off-licences to follow the example of pubs and act to end irresponsible drinks promotions and agree not to use alcohol as a loss leader on their premises".

Price problems

None of the big four bosses were willing to discuss below-cost selling, even though the Competition Commission has already found some evidence of this at all four, as well as at several other retailers. The problem is, suggestions of minimum pricing make supermarkets rightly jumpy and, as Sainsbury's Grant pointed out, price fixing is not legal.

Grogan told the four: "Pubs feel they can sign up to a code legally. If legality is the problem, we can help you with the legal problem. I'm sure some of the pub companies would share some of their legal advice."

The pub trade should, of course, share its learnings with the off-trade, and it has no doubt made great strides; but the pub company agreement referred to in the EDM does not, it seems, include detail on price. As Simon Townend of ≠Enterprise Inns explained: "There was no price-controlling agreement. It was a simple agreement not to promote excessive drinking."


So, were the Supermarket Four found guilty? In my opinion, no. Supermarket directors rebutted accusations of irresponsibility one by one, emerging as clued-up commercial realists not pantomime villains.

Perhaps the scales will have fallen from the eyes of the EDM's various supporters following the meeting. Certainly John Grogan MP, who tabled the EDM in the first place, was fair and balanced in his comments and did recognise the good work done by the sector.

Supermarkets, like most industries, are trying to make money in a competitive environment by selling perfectly legal products, including alcohol. Price-fixing agreements are not a realistic solution, but the Competition Commission must look again at supplier-buyer relationships for the sake of the survival of the independent retail trade.

The drinks trade as a whole should not allow itself to be split into factions. If this continues, the government will drive coach and horses through the gap in the middle.

As Tesco's government affairs manager Emma Reynolds suggested, "a collaborative approach between the on- and off-trades and government is the way forward in terms of tackling this issue".

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