Drinks companies hoping retailers would go easier on the deep discounts this Christmas are in for a depressing reality check.

Major suppliers - including Diageo, Pernod Ricard and Beam Global Spirits & Wine - pleaded with retailers to go easier on the heavy promotions this year in a bid to inject some value into the category.

But their calls appear to have fallen on deaf ears. This week, Tesco head of BWS Dan Jago said he expected promotional activity to be even more aggressive than last year.

"BWS will always be first port of call for some retailers to use as headline promotions over the festive period, because alcohol is still an important part of the mix at Christmas for consumers," he said.

"This is nothing new, but it is a particularly competitive year in BWS following a wet summer. As a result, promotions have started earlier and with more energy than last year."

Indeed, retailers began advertising festive deals as early as the beginning of this month. Tesco was offering two cases of beer for £16, half-price Champagne and some spirits at three-for-£25.

Asda offered two cases of beer for £16 or three-for-£20, while Morrisons offered cheap wine and beer.

Diageo GB grocery channel director Andy Adams urged retailers to think twice before promoting so deeply, so early.

"Price is important to consumers, especially around Christmas," he said. "However, while they start to think about Christmas around the end of September, December is the key month of purchase, so it's important for retailers to manage their price point throughout the season to deliver value. Heavy discounting in November may move stock, but it won't deliver any value."

At the moment, however, prices appear to be holding up. The Grocer's annual Christmas Pricewatch survey, which started this week, shows prices are not as low they were in the same week last year.

Baileys and Bell's whisky are selling at 5p more per 100ml, Stella Artois at 2.6p more and Hardys Stamp at 10p more.

There is still plenty of promotional activity, though, with offers running on Baileys and Bell's in all six of the multiple grocers.

Pricewatch p65

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