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07-05-2013, 09:38
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The Morning Advertiser reports (slightly late) on CAMRA’s U-turn over minimum alcohol pricing (http://www.morningadvertiser.co.uk/General-News/CAMRA-U-turn-over-minimum-unit-alcohol-pricing), mentioning the proposer of the motion (otherwise known as Tandleman (http://tandlemanbeerblog.blogspot.co.uk/)) by name. Jonathan Mail, head of public affairs at CAMRA, told the paper “We’re in the process of formulating a new position on below-cost alcohol sales”.
While it’s easy to declare yourself against below-cost selling, in practice it’s very hard to define, as I explained here (http://pubcurmudgeon.blogspot.co.uk/2010/07/not-so-simple.html). Any attempt to set a notional “cost of production” is in effect minimum pricing by the back door, and to subject supplier invoicing to audit would be unbelievably bureaucratic and time-consuming. The only robust and intellectually credible position is to define cost simply as duty and the VAT on duty.
It’s also a complete myth - although a convenient one for those who want to point the finger at the evil supermarkets - that below-cost selling occurs to any significant extent anyway, as it would simply be bad business. It makes no sense whatsoever for supermarkets to sell any substantial proportion of products at a loss, although of course they drive a hard bargain with their suppliers. Loss-leading only works on products such as milk and bread which represent a small proportion of overall spend and which can be easily compared between different retailers.

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