Reading this interview with the Liberal Democrat leader Nick Clegg, it struck me that he had fallen into the common trap of confusing minimum pricing with banning below-cost selling. In reality, the two are completely different concepts. The vast majority of the alcohol sold below 50p a unit, and even below 30p a unit, is not sold below the cost price, whereas it wouldn’t be difficult to sell fine wine and malt whiskies below cost and yet still come in well above 50p a unit.
The supermarkets are often accused of below-cost selling, but in reality those low prices they offer on multibuys are likely to be the result of driving eye-watering bargains with brewers. I’d be amazed if even half a percent of the alcohol units sold by the typical supermarket were sold below cost.
And, while banning below-cost selling may seem a no-brainer to many, it could easily end up having the unintended consequence of preventing retailers (and pub licensees) selling off short-dated stock, or the end of a barrel, at a reduced price, and stopping them providing tasting samples or even the occasional free pint for a valued customer.
Tasters are something that bothers me when considering minimum pricing. Tasters are a powerful way of ensuring the customer is happy with his purchase.
ReplyDeleteGood points. Do you think Wetherspoons can really buy their IPA for less than 99p a pint though ?
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