Stuart Smith's Blog

Whatever took it so long? After years of quiescence on the issue of alcohol abuse fueled by cut-price booze, Tesco has come out all moral and now supports the medical profession’s call for a minimum price per unit.

The immediate cause of this Damascene conversion is a survey of Tesco customers, which found that 70 per cent of them thought excessive drinking was one of the most serious issues facing the country. Tesco, as a consumer champion, must be seen to be acting in its customers’ best interests; and the message here is loud and clear. So loud and clear, in fact, that it’s surprising Tesco didn’t get that message earlier. Such a massive shift in social attitude does not happen overnight.

So what really flipped the switch? The truth is the supermarkets’ longstanding love affair with discounted and BOGOF beer has finally become an embarrassment, even to themselves.

Certainly the drinks industry itself is no great supporter. Below-cost reductions make a mockery of brand investment and threaten to undermine a carefully cultivated image of social responsibility, illustrated in such initiatives as Drink Aware. But with the supermarkets accounting for over 70% of off-trade distribution, serious complaint (as opposed to moaning) has not up to now been an industry option.

What has changed is the UK government’s stance. Knowing the new coalition is committed to an imminent ban on below-cost alcohol sales, Tesco is now seeking to trump that initiative by going one stage further and endorsing minimum pricing. As the UK’s largest grocer – largest retailer for that matter – it’s fair and reasonable that it should show leadership in these matters. Isn’t it?

Only slightly is the moral purity of this CSR initiative diluted by Tesco’s reluctance to introduce an immediate self-denying ordinance. After all, argues the retailer, there’s the World Cup to consider and by acting unilaterally it would simply cede market advantage to its less scrupulous rivals.

Looking at the ‘market advantage’ argument for a moment, it’s hard to see how it holds up. If it’s about money, then why continue with loss-leader culture a moment longer? If it’s about share (which I strongly suspect it is), how long would Tesco’s rivals dare to hold out, given the risk of being stigmatised as the irresponsible ‘bad guys’ in the media?

Tesco should have had the courage of its convictions and proposed its own timetable. That’s what leadership is about. Blaming inaction on government dilatoriness, as Tesco’s director for corporate affairs recently attempted to do, simply won’t wash.

Whether, of course, such measures (when they are finally implemented) will actually succeed in curbing alcohol abuse is anyone’s guess.

The drinks industry will quietly welcome an end to “below-cost” alcohol promotions but stop well short of supporting a minimum price.

Its standard fall-back position (also adopted by the British Retail Consortium) is that alcohol abuse is a cultural disease barely susceptible to treatment by price control. Maybe so – although there are plenty who would agree with the chief constable of Manchester’s assessment that “culture is created by things like the price…if you make alcohol cheaper, it fuels that problem.”

The ulterior fear in the industry is that minimum pricing is a foot in the door for a rabid health lobby bent on the eventual prohibition of alcohol marcomms. For good reason, the Advertising Association was quick to crack down on the National Institute of Clinical Excellence (NICE) when it recently had the temerity to suggest that minimum pricing should be accompanied by a ban on advertising – a suggestion that clearly flies in the face of stated government policy.