UK supermarkets shifting alcohol taxes

27th June, 2014 by Melita Kiely

UK supermarkets are responding to increases in alcohol taxes by subsidising cheaper products and shifting more of the tax hikes onto more costly products, new research claims.

Supermarkets-alcohol

UK supermarkets are subsidising prices on cheap alcohol in response to hikes in alcohol taxes, new research shows

The study  – published in the journal Addiction – was led by the University of Sheffield’s School of Health and Related Research (ScHARR), with business experts from the University of East Anglia (UEA) and Loughborough University and funded by the Medical Research Council.

Researchers used weekly product-level supermarket prices for 254 alcohol products to analyse how prices shifted in response to tax changes, examining drinks sold at different price points in four categories: spirits, beers, ciders and wines.

The results revealed retailers are tackling rises in alcohol taxes by “under-shifting” their cheaper products (raising prices below the level implied by the tax increase) and “over-shifting” more expensive products (raising prices below the level implied by the tax increase).

While under-shifting affected approximately one in six product lines, these drinks accounted for 38% of total spirits sales, 68% of beer and 31% of cider.

“The Government has identified the ready availability of cheap alcohol as a key influence on the UK’s high rates of alcohol-related harm,” said Professor Petra Meier, principal investigator from Sheffield Alcohol Research Group at the University of Sheffield.

“Alcohol duty increases can be part of a mix of measures to tackle this problem. Our new research shows that after a tax increase, supermarkets appear to subsidise those cheaper products and pass more of the tax inxreases onto the mid-range and more expensive products.

“Because these cheaper products are the ones which tend to be favoured by high-risk drinkers, the implication is that this could hinder efforts to reduce harmful drinking.”

Last year ScHARR reported that the Government’s ban on below-cost selling, which would prevent retailers selling alcohol cheaper than the cost of the tax payable on the product, would have a negligible impact on the consumption of alcohol, in comparison to a 45p minimum unit price of alcohol.

Leave a Reply

If that's interesting, how about these?

Russia 'legalises' whisky production

Russia can now legally make whisky and moonshine after the introduction of new more...

Jersey has one of Europe's worst alcohol problems

Jersey has "one of the worst drinking problems in Europe", with one in 25 more...

Top tips to run a successful start up: Part 2

For those with the ambition to make their first foray into the fiercely more...

Irish alcohol bill delayed until autumn

Legislation to introduce minimum pricing for alcohol and regulate advertising more...

Alcohol is next plain packaging target, warns Australian lawyer

Australian regulators could introduce graphic warning labels on alcoholic more...

UK underage drinking falls to lowest recorded levels

Government statistics show that underage drinking in the UK continues to more...

Australians swap vodka for gin, research shows

Gin has experienced rapid growth in Australia over the past five years and is more...

The Macallan brings Rare Cask edition to UK

The Macallan Scotch whisky has introduced a new expression called Rare Cask to more...

Maker’s Mark and Breeders’ Cup pair up for charity

Bourbon brand Maker’s Mark has agreed a three-year partnership with The more...

New alcohol outlet aims for 5,000 stores by 2020

Budget alcohol outlet company Licor Zone aims to open 5,000 stores by 2020 by more...

Two drinks can cause high blood pressure

A study has revealed consuming two alcoholic drinks every day could raise a more...

G&T beats Pimm's as UK favourite summer sip

Gin and tonic has beaten Pimm's as the UK’s favourite spirit-based drink this more...

Jim Beam launches retailer barrel selection scheme

Beam Suntory has launched a scheme that allows retailers to sample barrels of more...

New spirits products target 'metrosexuals'

Spirits brands are launching products that appeal to “metrosexual more...

Strong demand for coffee shop cocktails

Research by CGA Strategy has identified “huge potential” for serving more...

Balblair introduces single cask offer

Balblair is offering key customers the opportunity to purchase single casks for more...

Ryanair bans duty free alcohol on flights to Ibiza

Ryanair has banned all duty free alcohol on board flights from the UK to Ibiza more...

Bacteria can extract copper from whisky waste

Scientists at the University of Edinburgh have developed a new method of cooper more...

Harmful drinking is a 'middle class phenomenon'

People aged 50 and over in England who are classed as ageing "successfully" are more...

SB competes in Finest Call's speed cocktail competition

American Beverage Marketers cocktail mix brand, Finest Call, brought its speed more...