Minimum pricing to hit 8% of non promoted supermarket alcohol
More than one in 12 alcoholic drinks sold in supermarkets, outside of promotions, would clash with UK government plans to ban sales of items priced below 40 pence (USD 0.65/EUR 0.50) per unit of alcohol, and cider would be hit the hardest.
In March 2012 the UK government unveiled plans for minimum alcohol pricing in England. The proposal suggests a minimum price of 40 pence per alcohol unit as part of a wider alcohol strategy to curb health problems and crime associated with binge drinking.
A survey by research company Brand View found that of 12 April 2012, 8 percent of products in the alcohol category had a base price (non-promoted) below 40 pence per unit. More than one-third of these were supermarket own-label brands.
The survey raised concern about a range of branded products including Tennent’s lager (C&C Group), Stella 4% lager (AB-InBev) and Strongbow cider (Heineken). It claims that all three currently have products selling in supermarkets below 40 pence per unit, with Strongbow having half of its product range below the threshold.
The survey also revealed that some lager lines in supermarkets, mostly own-label, will need to adjust their pricing while Strongbow, own-label ciders and other brands will have to “significantly raise their prices”.
The survey concluded: “Some products will need a radical change in price or a reduction in alcohol content. It is unlikely that these brands will be unable to compete with established premium brands at the higher price demanded by the new legislation.”
The survey coincided with a report by the British Beer & Pub Association that pubs have seen a 6 percent fall in beer sales in the first quarter of 2012.
The association put the drop down to the continued huge rises in the tax on beer. The decline in pub sales amounts to 57 million fewer pints sold, compared to last year’s first quarter.
In contrast, the British Beer & Pub Association found that off-trade sales (ie supermarkets) were up nearly 5 percent in the first quarter.
However, beer sales are now falling at a slower rate than in the previous four years. Overall beer sales fell by 1.4 percent in the quarter compared to last year.
In the year to March 2012, overall beer sales were down 2.9 percent, following the 7 percent rise in beer duty last March.
All eyes are now set on the London Olympics to reserve this trend – at least temporarily.
