Morrisons' proposal to tackle below-cost selling and the misuse of alcohol has been panned by wholesalers and independents.

The supermarket has written to the government to propose a ban on the sale of alcohol at a price below the rate of duty and VAT, with a fine for breaking the law of £25,000.

"We believe this mechanism, if enshrined in law, would provide an immediate and fair approach to stem the misuse of alcohol," said Morrisons director of corporate affairs Richard Taylor. "If the government thinks the price needs to be raised, it can do so with confidence by raising duty and ensuring the money goes to the Exchequer."

Morrisons claimed that by using 'duty plus VAT', the government would not have to deal with the difficult issue of producing a definition of 'cost'.

However, the Federation of Wholesale Distributors accused Morrisons of being 'duplicitous'. "We are very much in favour of a ban on below-cost selling, but Morrisons' proposal would change nothing," said FWD chief executive James Bielby. "Duty plus VAT is not cost at all as it does not take into consideration the cost of production."

Association of Convenience Stores chief executive James Lowman agreed and said the industry needed to work with government to come up with a formula that defined cost in simple terms.

However, Tesco, which also indicated last month that it would support government plans to introduce minimum pricing, welcomed Morrisons' proposal.

"Our customers are concerned about the effects of alcohol on society, and Morrisons' proposal adds to the debate on how we tackle this issue," said a spokesman. "We will support whatever measure the government introduces, whether that is a minimum price or a ban on below-cost selling."

Read more
Morrisons: Fine retailers for selling booze below cost (10 June 2010)
Why a below-cost booze ban will be harder than it sounds (29 May 2010)
Tesco boss Leahy backs below-cost booze ban (21 May 2010)

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