Commercial impact of below-cost sales ban

06 August, 2010

Asda admits banning the sale of alcohol at below cost price could have a commercial impact, but says “it’s a price it’s willing to pay”.

The supermarket became the first retailer to unilaterally end below-cost selling by introducing a policy not to promote alcohol for less than the combined cost of duty and VAT.

Asda has set a base price, founded on current duty and VAT levels of £7.34 for a 37.5% abv bottle of spirits, £1.99 for still wine and £7.17 for 20 cans of standard lager.

Category director for beers, wines and spirits Adrian McKeon said: “We are taking a leadership approach. Historically we have sold below duty and VAT. Yes, there will be a commercial impact on the business, but it’s a price we are willing to pay. Our future offers will have to change.”




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Lifting the spirits

I were to sum up alcohol sales over Christmas 2017 in one word, it would be “gin”. At Nielsen, we define the Christmas period as the 12 weeks to December 30 and in that time gin sales were £199.4 million, which means they increased by £55.4 million compared with Christmas 2016. There’s no sign the bubble is about to burst either. Growth at Christmas 2016 was £22.4 million, so gin has increased its value growth nearly two-and-a-half times in a year. The spirit added more value to
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