MPs criticise below-tax ban

18 February, 2011

Backbench MPs have called on the government to take more action against super­markets that sell alcohol at rock-bottom prices.?A debate convened by Labour MP Nick Smith included claims that plans to ban drinks sales below the combined cost of duty and VAT would do little to curb alcohol abuse.?Lib Dem MP Greg Mulholland said: “To say below-cost selling simply involves tax suggests supermarkets buy alcohol for nothing. Why would supermarkets not welcome either a genuine ban on below-cost selling or a minimum price per unit? Those approaches would increase their revenue, but they sell cheap alcohol for other reasons. Let’s face it, supermarkets have virtually destroyed the standalone off-licence trade in this country.

“There is something more sinister going on. Below-cost selling is a way to attract people into stores and maintain supermarkets’ power over manufacturers, some of which are too small to argue. That situation is causing a problem.”?Tory MP Dr Sarah Wollaston said: “Perhaps we should consider a levy just on the off-trade of 5p to 7p a unit on all off-licence sales. That would leave 18 billion units of on-licence sales of alcohol unaffected. I don’t seriously believe the government’s current proposals, while a step in the right direction, will have meaningful impact on severe problem drinkers, particularly young binge-drinkers.”?Home Office minister James Brokenshire said there were issues around competition law that had limited the government’s room for manoeuvre. “Our modelling indicates that the change we are proposing – duty plus VAT – will reduce the number of crimes by about 7,000 and hospital admissions by about 1,000,” he said.

“We need to produce something that is understandable and easy to enforce. There are other models, such as invoice pricing, but we did not want to get involved in them because of the bureaucracy attached to them.”?A spokesman for SAB Miller commented: “Broad-brush regulation will not be effective in tackling the complex problem of alcohol misuse. Irresponsible drinking needs to become socially unacceptable.”

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