The day after Sir Terry Leahy announced his support for a ban on below-cost alcohol, Tesco was the consumer's best bet for cut-rate booze with four of the five cheapest supermarket beer deals, research for The Grocer can reveal.
Last Friday Sir Terry went on record to welcome the government's crackdown on below-cost selling, but said excessive drinking was not something Tesco could tackle on its own.
Exclusive analysis by Assosia from promotions data last weekend, however, showed Tesco was the only multiple to promote lager below the cost of duty and VAT, with a Stella 24-pack on sale for £10 or minus 6ppl, if VAT and duty were deducted.
Foster's was in Tesco for 11p per litre, Carlsberg for 15p and Carling for 17p, once the Chancellor took his share. Asda offered the fifth-best deal, with 20 cans of Carling on sale for £9, or 18ppl after tax.
Both Morrisons and Sainsbury's have said they do not sell alcohol below the cost of duty plus VAT, a term Sainsbury's called "the most commonly used way to define 'below cost'". Tesco said below-cost promotions were rare.
But while the definition of below-cost selling varied according to "which side of the fence you're on", the sales director of a major lager brand claimed lager was being sold on promotion at 60p per litre below the cost of production, on average.
"A definition of cost as tax and VAT is not cost," added Mark Hunter, CEO of Carling brewer Molson Coors. "Cost is the tax element and a proxy or nominal cost of production."
And Hunter called on trade associations and the beer industry to respond positively to the government's pledge by coming up with a nominal cost of production per hectolitre to make regulation of below-cost sales possible.
Enforcing a ban could also prove difficult for the government because of the complicated invoicing practices, however.
"It's not just about how much a supplier is charging up front, it's about how much a supplier is offering to the retailer in return for, say, promotional activities or volume incentives," said a beer buyer for a national supermarket. Finding who was paying for below-cost deals could therefore be hard to establish, he claimed.
Of suggestions that alcohol was being sold to retailers free of charge, Hunter said this was not the case for Molson Coors, adding that any supplier would be "bonkers" to brew beer for no profit.
"Retailers have realised that the alcohol category can drive footfall. How they use their marketing spend is a question for them."
On shelf last weekend: price per litre at Tesco after VAT and duty are deducted
Stella Artois: -6p
Pre-promo: £1.42
Deals: 24 cans £10
Fosters: 11p
Pre-promo: £0.95
Deals: 24 cans £10
Carlsberg: 15p
Pre-promo: £1.69
Deals: 24 cans £10
Carling: 17p
Pre-promo: £1.52
Deals: 45 cans £20
Last Friday Sir Terry went on record to welcome the government's crackdown on below-cost selling, but said excessive drinking was not something Tesco could tackle on its own.
Exclusive analysis by Assosia from promotions data last weekend, however, showed Tesco was the only multiple to promote lager below the cost of duty and VAT, with a Stella 24-pack on sale for £10 or minus 6ppl, if VAT and duty were deducted.
Foster's was in Tesco for 11p per litre, Carlsberg for 15p and Carling for 17p, once the Chancellor took his share. Asda offered the fifth-best deal, with 20 cans of Carling on sale for £9, or 18ppl after tax.
Both Morrisons and Sainsbury's have said they do not sell alcohol below the cost of duty plus VAT, a term Sainsbury's called "the most commonly used way to define 'below cost'". Tesco said below-cost promotions were rare.
But while the definition of below-cost selling varied according to "which side of the fence you're on", the sales director of a major lager brand claimed lager was being sold on promotion at 60p per litre below the cost of production, on average.
"A definition of cost as tax and VAT is not cost," added Mark Hunter, CEO of Carling brewer Molson Coors. "Cost is the tax element and a proxy or nominal cost of production."
And Hunter called on trade associations and the beer industry to respond positively to the government's pledge by coming up with a nominal cost of production per hectolitre to make regulation of below-cost sales possible.
Enforcing a ban could also prove difficult for the government because of the complicated invoicing practices, however.
"It's not just about how much a supplier is charging up front, it's about how much a supplier is offering to the retailer in return for, say, promotional activities or volume incentives," said a beer buyer for a national supermarket. Finding who was paying for below-cost deals could therefore be hard to establish, he claimed.
Of suggestions that alcohol was being sold to retailers free of charge, Hunter said this was not the case for Molson Coors, adding that any supplier would be "bonkers" to brew beer for no profit.
"Retailers have realised that the alcohol category can drive footfall. How they use their marketing spend is a question for them."
On shelf last weekend: price per litre at Tesco after VAT and duty are deducted
Stella Artois: -6p
Pre-promo: £1.42
Deals: 24 cans £10
Fosters: 11p
Pre-promo: £0.95
Deals: 24 cans £10
Carlsberg: 15p
Pre-promo: £1.69
Deals: 24 cans £10
Carling: 17p
Pre-promo: £1.52
Deals: 45 cans £20
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