£2.48 wine 'above duty and VAT'

20 January, 2012

Asda has insisted that a wine it has been selling for £2.48 is not selling for less than duty plus VAT.

The supermarket has been running a promotion of First Cape’s Australian Devil’s Cove brand this month.

A spokeswoman said: “We are still clearing through old stock after our range changes at the end of last year. It takes a while to filter through. It’s not part of a campaign. The prices are above duty and VAT.”

Steve Barton, of brand owner Brand Phoenix, said the supermarket was clearing ends of lines after a packaging change on Devil’s Cove. “It is certainly not part of any brand plan,” he said. “We have no control over the retail prices.”

Asda has made a voluntary commitment not to sell alcohol for less than duty plus VAT. With duty on a bottle of wine at £1.80, VAT on the duty alone takes the price to £2.16 – leaving just 32p for the cost of the wine.

Nielsen analyst Stewart Blunt said he was “astounded” by the price. “I would have thought £2.99 would have been a perfectly good price,” he said.

One supplier commented that the retailer was “going unnecessarily close to a commitment they made” on duty plus VAT.

Last autumn Asda shocked the market with a £3 promotion to clear old stock, to make way for a new range of 75 wines. A spokesman told OLN in October that most of the marked-down stock had already sold through – but it included bottles of Devil’s Cove, which have now been reduced even further.

Asda has also been running £3 deals on four-packs of major beer and cider brands, including John Smith’s, Foster’s and Stella Cidre. The supermarket did not comment on the promotion.

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