Alcohol price comparisons before and after the budget

Supermarkets are shrugging off Alistair Darling’s budget-day increases in alcohol duty and have continued to slash the cost of some alcopops, cider, beer and wine.

Out of 150 products studied last week at Asda, Sainsbury’s and Tesco, 38 had fallen in price since before the budget by as much as one-third.

The chancellor raised levies on alcohol earlier this month amid fears that low supermarket prices are fuelling binge drinking, contributing to drunken violence and health problems.

Critics and industry experts said supermarkets were absorbing the duty rises themselves and continuing to use cheap alcohol as a “loss leader” to draw in customers.

John Grogan, the Labour MP who chairs the Commons all-party beer group, said: “The government’s attempts to combat binge drinking simply aren’t working. This duty rise hits pubs, but is simply ignored by supermarkets.”

In his budget on March 12, Darling raised duty by 4p on a pint of beer, 14p on a bottle of wine and 55p on a bottle of spirits. The changes came in on March 16.

But an analysis of costs before and after the budget suggests the increase has not been passed on to customers.

Prices of 50 alcoholic drinks at each of Asda, Sainsbury’s and Tesco were taken on February 26 and last week. Out of the 150 items, a total of 38 had fallen in price and 21 had stayed the same.

At Asda, one-third of items have fallen in price. The biggest falls in standard list prices – as opposed to special offers – were for beer. A pack of 20 300ml bottles of Budweiser went down from £14.97 to £11.94.

Alcopops – a mixture of spirits and sweet drinks – were also down, although budget duty increases should have seen them go up in price by 3p. Asda has cut the price of the alcopop Bacardi Breezer by 5p for a four-bottle pack.

At Sainsbury’s last week, a four-pack of Bacardi Breezer orange and raspberry was down by 49p to £3.50 thanks to a special offer. The store’s special offers have also seen a third knocked off the prices of popular brands of whisky and white wine since the budget. A 20-bottle pack of Beck’s beer has gone down £5 to £7.98.

Last week, public health experts warned of the increasing danger of teenage binge drinking as a result of cheap alcohol in supermarkets. A study of nearly 10,000 15 and 16-year-olds in the northwest found that 84% of teenagers regularly consume alcohol.

Mark Bellis, director of the centre for public health at Liverpool John Moores University, who led the research, said: “They should be out doing sport, but you only have to look at how expensive it is to book a tennis court or a five-a-side football pitch and compare it with the cost of a three-litre bottle of cider.”

Darling did not link the budget price rises to any attempt to control binge drinking, but the health department has commissioned Sheffield University to conduct research into the relationship between alcohol price and harmful drinking.

This week, Grogan’s group is inviting the major supermarket chains to a forum at Westminster to discuss the feasibility of introducing minimum prices for alcoholic drinks, a system that has just been introduced in Canada.

A spokesman for Asda said most of its alcohol prices had risen since the budget to reflect rising duty, but added: “on a number of products, prices have gone down due to competitive pricing”.

Sainsbury’s said it would not automatically increase wine and beer prices to reflect the rise in duty. “We are mindful of our customers’ budgets,” said a spokesman. Tesco, where the fewest cuts were found, said it had raised prices to reflect the budget increases.

Deborah Cameron, chief executive of Addaction, the UK’s largest specialist drug and alcohol treatment agency, said: “It is still a scandal that alcohol is being sold more cheaply than water in some supermarkets. As long as the big retailers continue to use alcohol as a loss leader, the increases in tax will not have any impact.”

Additional reporting: Nicky Trup

Explore Economics

• Autumn Budget 2007

• Budget 2008

• World Economic Forum

• The Times MPC

Times Recommends

• B&B shareholders forced into funding rescue
• John Lewis department store sales plunge 8.3%
• Families turn to credit to cover mortgage bills