How cheap can it get?

The Coalition Government is expected to make an announcement on below-cost sales — VAT plus cost — before Christmas 2010.

Supermarkets are to be banned from selling wine, beer and spirits below a national "minimum price" under plans to be unveiled by ministers.

The formula, aimed at clamping down on “loss leader” deals, means that no outlet will be able to sell any alcoholic drink for below the cost of duty on the product, plus VAT. Under the plans, the minimum price for a litre bottle of spirits would be GBP 10.50, while a 20-pack of beer would have to cost at least GBP 8.50, and a bottle of normal-strength wine at least GBP 2.

If outlets don’t stick to the minimum price, they are likely to lose their licence to sell alcohol as well as face fines.

A pledge to ban the sale of alcohol below cost price is a policy of the Coalition Government. This pledge was originally expected to find expression in a Police Reform and Social Responsibility Bill due to be introduced in December 2010.

However, the banning of below-cost selling is potentially as complex as introducing minimum pricing.

The Coalition Government has already said it needs more time to examine how it will work and the earliest we will see legislation regarding this matter is May 2012.

Cheer up, Britons, that means more cheap booze until then.