You are currently viewing the International Edition. You can also switch to the Hong Kong Edition.
Friday 3 July 2015

Supermarkets ‘subsidise cheaper drinks’

24th June, 2014 by Richard Ross

UK supermarkets are responding to tax increases by subsidising the price of cheaper drinks, and raising prices of their more expensive products beyond the level of increased tax. This could be hindering efforts to reduce harmful drinking, according to a new study from Sheffield University.

minimum unit pricingThe research, led by the University’s School of Health and Related Research, found that retailers appear to respond to tax increases by “under-shifting” their cheaper products. The authors of the study, funded by the Medical Research Council, and published today in the journal ‘Addiction’, conclude that supermarkets could be hindering efforts to reduce harmful drinking by diluting the impact of tax rises.

Researchers used weekly reports of product-level supermarket prices across 254 alcohol products and at different price points, analysing how those prices changed in relation to tax changes. The products ranged across beer, cider, spirits and wine. They found that price rises for the cheaper products were up to 15% below the level expected if the tax increase had been passed on fully.

The “under-shifting” was shown to affect around one in six of all products lines, but accounted for a larger proportion of total sales: approximately 68% of beer, 38% of spirits and 31% of cider sales.

The study concludes this will have a likely implication for health, as previous research indicates the heaviest 5% of drinkers in the UK buy 33% of all shop-bought alcohol, and tend to favour cheaper supermarket products.

Professor Petra Meier, Principal Investigator from Sheffield Alcohol Research Group (SARG) at the University of Sheffield said: “The Government has identified the ready availability of cheap alcohol as a key influence on the UK’s high rates of alcohol-related harm. Alcohol duty increases can be part of a mix of measures to tackle this problem.”

Professor Meier warns that subsidising cheaper products can be damaging. She adds: “Because these cheaper products are the ones which tend to be favoured by high risk drinkers, the implication is that this could hinder efforts to reduce harmful drinking”.

Last year Sheffield University reported that the Government’s introduction of the ban on below cost selling, preventing retailers selling alcohol at below the cost of duty and VAT, would have a negligible impact on the consumption of alcohol compared with a 45p minimum unit price for alcohol.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

If that's interesting, how about these?

Virtual reality could treat alcoholism

Virtual reality therapy is a "promising approach" to the treatment of alcohol more...

Wearable technology and the data driven night out

Ed Southerden, senior planner at creative communications agency Bray Leino, more...

Is powder the future of food?

A powdered food brand has launched in the UK that aims to change the way people more...

Supplier Relationship Manager

London, United Kingdom

Top 10 estates for en primeur returns

db rounds up the 10 best Bordeaux estates for en primeur returns on more...

Suntory's exquisite 3D-printed ice cubes

As far as advertising campaigns go, this collection of miniature ice cube more...

How to become a 'wine expert' in four hours

A doctor of psychology has devised 10 simple steps which he claims can set you more...

Hatch Mansfield – Brand Manager

London, United Kingdom

Competitive salary

World's most extravagant wineries

With Château Margaux preparing to unveil its new winery and cellar, designed more...

The London Wine Fair in pictures

From red trews and foie gras macaroons to 2CVs, wine on tap and temporary more...

10 richest people in the UK drinks trade

As The Sunday Times Rich List 2015 reveals the wealthiest individuals in more...

Business Development Executive

London, United Kingdom

£25-£30K + benefits, depending on experience

UK reviewing alcohol intake guidelines

Health officials are to review the government's drinking guidelines, as more...

Top 10 ways to reuse a wine bottle

If you are anything like the db team, it won't take long to amass a collection more...

Top 10 Negroni spots in London

As the Campari Red Night District takes over London's Shoreditch, we round up more...

London Sales Manager / Key Account Manager

London, United Kingdom

Competitive - depending on skills and experience

Top 10 banned alcoholic drinks

The drinks trade has seen its fair share of drinks banned from public more...

Top 10 modern wine drinker stereotypes

From Rioja lovers to Champagne quaffers, the drinks business has more...

Top 10 architectural wonders of the wine world

You don't have to look far to find stunning examples of architectural prowess more...

Top 10 new products

This month's top releases include a Champagne tankard designed by Pol Roger, more...

Top 10 wine brands 2015

In a year that saw major shifts in the global wine market, the drinks business more...

Top 10 silly stories of the month

the drinks business might be a serious drinks trade publication, but we more...

International Business Development Assistant

London, United Kingdom

To be determined, based on the profile and experience of the candidate

Red wine could help fight depression

A component found in the skins of red grapes could be used to treat depression more...

Top 10 worst estates for en primeur returns

Using Liv-ex's data, db rounds up the worst 10 châteaux for en primeur more...