One of the UK's biggest brewers has reacted with "despair" to news that Yuletide beer prices have plummeted to new lows - with a month still to go until Christmas day.

After heavy festive discounting by the major multiples last year, brewers would have been forgiven for thinking it couldn't get any worse.

But it already has, with supermarkets starting the battle to drive Christmas footfall earlier than ever.

The Grocer's Christmas Pricewatch survey of 2006 - which begins this week and runs until January - reveals the price of Stella Artois has plunged to 11p per 100ml in Morrisons. The lowest price recorded last year for the whole Christmas period was 12p per 100ml.

InBev UK, which brews Stella, was reserved in its reaction to the news.

Stuart MacFarlane, MD for take home, said: "The Pricewatch findings indicate just how aggressive retailers are being in terms of pricing on a number of market leading brands.

"I fully understand that retailers operate in a highly competitive environment and will discount key beer brands, particularly the market leader Stella Artois, to drive shopper footfall over the festive season."

But this was a change of tune from last January when, in the wake of fierce price cuts in the beer aisle, MacFarlane told The Grocer: "It means that once again millions of pounds have been stripped out of the category at the time of heaviest consumer demand."

Rival Scottish & Newcastle UK, which brews Foster's, Kronenbourg and John Smith's ale, all of which are likely to see their fair share of price cuts this Christmas, was more outspoken.

"We continue to despair at the level of value taken out of the category at times of peak demand," said Mark Gerken, Scottish & Newcastle UK's off-trade sales MD. "We can still provide extremely good value for money to entice people, but do we really need to go to the levels of pricing we are seeing in the market in pursuit of market share?"

There was better news for Diageo's Bailey's, which is selling at far higher prices than this time last year - for now, anyway. Baileys is still maintaining a price over the £10 mark, with all retailers recording a price of £1.25 per 100ml. This time last year the price had already dropped to 98p/100ml.

"Last year retailers were driving a single bottle price but this year they are driving a trade-up mechanic of buy two for £25," said Andy Adams, Diageo's trading director. "We can't influence the retail price but the promotional mechanic they are supporting now will drive great sales."

There is more evidence that Christmas booze bargains are coming earlier in this week's Promotrack data on page 22. Alcohol is the most active category with 28% of all promotional space. In the same week last year frozen food led the way with 17%.

Alcohol promotions represented only 10% of space this time last year.

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