Wholesalers are working out the average price they pay for key booze lines to help the government ban below-cost sales of alcohol.
A representative sample of Federation of Wholesale Distributors members have supplied information about how much they pay for alcohol.
The data will then be collated to draw up an average price for the wholesale sector. Supermarkets and off-licence chains will also be given the opportunity to contribute, to give an overall picture of the off-trade.
The information will then be passed to the Home Office to use as a model for defining 'cost'.
The government hopes to ban sales of alcohol below cost-price and has asked the industry for ideas on how to define cost.
As revealed by The Grocer last month, it is considering four main definitions of cost: duty plus VAT; duty plus VAT plus cost of production; invoice pricing, in which retailers are not allowed to sell below the cost they pay for the product; and voluntary pricing, in which the supermarkets can work together to set a minimum price.
The FWD favours the second option and the model it is working on is designed to demonstrate a workable method for calculating cost, said chief executive James Bielby.
"We don't want a definition of cost that's just duty plus VAT," he said. "There needs to be a cost of production in there as well. Duty plus VAT would have no impact and would not address the competitive harm caused by the discounting by supermarkets.
"We are working up a model that is based on the prices that suppliers sell to our members. It will be a starting point for the debate."
The Home Office had been "very supportive of the modelling", he added.
The government's consultation on alcohol taxation will end on 6 September.
The FWD's model will not be finished by then but should be completed by the end of September and presented to the Home Office a couple of months later.
A representative sample of Federation of Wholesale Distributors members have supplied information about how much they pay for alcohol.
The data will then be collated to draw up an average price for the wholesale sector. Supermarkets and off-licence chains will also be given the opportunity to contribute, to give an overall picture of the off-trade.
The information will then be passed to the Home Office to use as a model for defining 'cost'.
The government hopes to ban sales of alcohol below cost-price and has asked the industry for ideas on how to define cost.
As revealed by The Grocer last month, it is considering four main definitions of cost: duty plus VAT; duty plus VAT plus cost of production; invoice pricing, in which retailers are not allowed to sell below the cost they pay for the product; and voluntary pricing, in which the supermarkets can work together to set a minimum price.
The FWD favours the second option and the model it is working on is designed to demonstrate a workable method for calculating cost, said chief executive James Bielby.
"We don't want a definition of cost that's just duty plus VAT," he said. "There needs to be a cost of production in there as well. Duty plus VAT would have no impact and would not address the competitive harm caused by the discounting by supermarkets.
"We are working up a model that is based on the prices that suppliers sell to our members. It will be a starting point for the debate."
The Home Office had been "very supportive of the modelling", he added.
The government's consultation on alcohol taxation will end on 6 September.
The FWD's model will not be finished by then but should be completed by the end of September and presented to the Home Office a couple of months later.
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