Steve Hawkes, Retail Correspondent and Patrick Foster
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Tesco was branded as hypocritical last night over its call for a ban on the
sale of cheap alcohol, after figures showed that it has slashed at least
three times more from the price of leading beers, wines and spirits than its
rivals in the past year.
Research for The Times reveals that Britain’s biggest supermarket has
cut an average of 10 per cent off the price of more than a dozen leading
brands since February 2007.
Over the same period the prices of the same products at J Sainsbury have
fallen by 2.8 per cent and Asda’s have risen by 1.3 per cent.
Despite urging Gordon Brown to introduce legislation to “ensure responsible
pricing” yesterday, Tesco has reduced the price of a can of Carling lager to
54p and a 12-pack of Guinness by 30 per cent this week.
Critics rounded on the supermarket giant, accusing it of being more concerned
with grabbing headlines than taking action.
Tesco’s call came after months of intense criticism of the supermarket sector
for selling cut-price booze and failing to do enough to tackle underage and
antisocial drinking. The resulting publicity is thought to have prompted the
Morrisons chain to pull advertisements for discounts on beers and wines this
weekend.
Julian Le Grande, chairman of Health England, said: “For Tesco to cut prices
to this extent, particularly in a world where you have an increasing threat
from alcohol and the trend of binge drinking, and at the same time calling
for a ban on cheap alcohol – there is an element of hypocrisy in that. For
years many supermarkets have been cutting their prices at the same time as
often claiming complete innocence, that they’re just doing what the consumer
wants.”
A spokesman for Alcohol Concern said: “It’s disappointing that the first
major chain to acknowledge the contribution that loss-leading makes to
alcohol harm is nevertheless the biggest discounter. Tesco got an awful lot
of coverage for what they’ve said. These figures reinforce the need for
robust government action if we are to see the end of deep discounting and
all the harm that it can cause.”
The Department of Health refused to comment. It had issued a statement
yesterday from Dawn Primarolo, the Public Health Minister, praising Tesco
for its move to “share their concern about the impact of cheap alcohol on
the health of the public”.
The Competition Commission revealed last autumn that all leading
supermarkets, including Waitrose, regularly sell alcohol at below cost in an
attempt to lure customers and boost sales.
Between January 2005 and the World Cup in the summer of 2006, Britain’s nine
biggest grocers generated 3 per cent of their total revenue from below-cost
selling of alcohol and other goods, such as canned vegetables.
Tesco is the first supermarket to break cover but said that it would not put
its prices up unilaterally as its customers would simply shop elsewhere.
It called instead for a mandatory price rise instigated by the Government.
Sir Terry Leahy, Tesco chief executive, has already had a private meeting
with the Prime Minister to discuss measures to tackle the rise in underage
drinking.
One industry insider said that Tesco’s move was a way of placing the problem
of cut-price alcohol back in the Government’s lap.
Another source said: “Tesco has been very cute. If anything it’s given them
the perfect opportunity to show just how cheap their beer and wine is just
ahead of the end of their financial year.”
Tesco said that the figures compiled for The Times “miss the point of
our announcement”.
Lucy Neville-Rolfe, Tesco’s executive director for corporate and legal
affairs, said: “We can’t put up our prices because people will simply shop
elsewhere – it could be commercial suicide - and we can’t act together to
put up prices because that would be against competition law. Supermarkets
are not allowed to act together to put up prices because that would be bad
for the consumer. The only safe solution is for the Government to initiate
and lead these discussions and to bring forward legislative proposals which
Tesco and others in our industry can support” she added.
Andy Bond, the chief executive of Asda, is due to announce his chain’s own
measures to counter underage drinking on Monday. These are expected to
include a move to increase the number of IDs checked at the tills.
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