Commercial impact of below-cost sales ban

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.”