UK Pub Sales Agents News - Ban on Pubs & Bars Selling Below Cost Alcohol

Property News - Ban on Pubs & Bars Selling Below Cost Alcohol

Licensing Legal looks at the introduction of the ban on below-cost alcohol. This means that shops and bars will no longer be able to sell drinks for less than the tax they have paid on them. The Government believes that this move will reduce alcohol-related crime but how will this affect most businesses?

There is little known about the implications, as with most new legislation the outcome can only really be assessed once it becomes a reality. Speculation is rife as to what effect this will have; the honest answer is that we simply don’t know.

The ban has been calculated using a duty plus VAT rate, which will prevent the following:

• a litre of vodka being sold for less than £10.71
• 440ml of lager being sold for less than 38p
• a litre of cider being sold for less than 40p

To put this into perspective – in the run up to Christmas, several supermarkets were offering deals whereby alcohol could be purchased for as little as 43p per pint. One leading supermarket chain even offered three for £20 on a range of cases of beers and ciders.

It is probably realistic to say that the ban will have little impact on most pubs and bars; and it is doubtful that it will go far enough to ensure that supermarkets raise their prices and level out the playing field for their competition. Representatives of the ‘on’ trade specifically called for more support to be offered to pubs by raising the price even further so that they could compete more fairly.

In truth, most pubs and bars cannot afford to lower their costs significantly in order to return a higher profit.

The reality is that the ban has been implemented to assist in the reduction of alcohol-related crime and health issues. Is it another blow to the industry? Perhaps, but then a survey conducted using a focus group revealed that only large price increases would have an impact on Crime & Disorder and on consumption.  This ban will probably be a barely noticeable bump in the road for most Operators.

via uk-pub-sales.net

Posted via email from UK Pubs For Sale And Development