Cider prices to treble. Three-for-£10 wine deals axed. Over 75% of own-label booze prices forcibly hiked in price. The full scale of the inflationary impact of the Prime Minister’s proposed minimum price increases on the most popular lines and deals can be revealed by The Grocer.
One in 10 alcohol lines on sale this week at the big four would have to increase in price if David Cameron’s plan to introduce minimum pricing of 40p-50p per unit, leaked to the national media last weekend, goes ahead.
A study by The Grocer of 1,612 beer, cider and spirit products revealed at least 11% would fall foul of the price per unit (ppu) limit. And the number would rise to 34% at the upper 50ppu level.
Worst hit would be own label – 41% of own-label alcoholic drinks SKUs would need to rise in price at a minimum 40ppu price. But the figure rises to 75.9% at 50ppu, including all budget own-label spirits.
The most dramatic change would be in cider. A three-litre bottle of Tesco strong cider, with a 5.3% abv, which currently costs £2.66, would have to more than double in price to between £6.36 and £7.95. But it’s not just cheap own label varieties that would be hit. A 2-litre 5.3% bottle of Strongbow would face a hike of nearly a third from £3.23 to £4.24 (at 40ppu) or £5.30 (at 50ppu).
So-called premium brands would be affected too. This week Waitrose was selling two 500ml bottles of Henry Westons Vintage Cider – an 8.2% oak matured brew made with ‘top quality cider apples of a single year’s crop’, according to brand-owner Weston – for £3. Under Cameron’s proposals two bottles could not be sold for less than £3.28 under 40ppu or £4.10 under 50ppu.
Price hikes on spirits would also hit hard. A 700ml bottle of Tesco Value vodka, currently £8.72, would have to rise at least 21% to £10.52, or 51% to £13.15 at 50ppu. And a 700ml bottle of Bushmills Irish whiskey, sold this week by Asda for £10 would have to rise to £11.20-£14.
Multibuy deals on popular brands of lager would disappear under the proposals. The 3 for £20 deals favoured by supermarkets in the run up to events such as Christmas and Easter would cost at least £5 more under the government’s proposals, depending on the strength of the beer and the minimum price adopted.
Minimum pricing could also spell the end of 3-for-£10 wine deals, such as the 42 bottles on offer at Asda this week – a bottle of 13.5% abv wine, which contains 10 units, would cost between £4.05 and £5.06 under the proposals. The minimum price of a bottle of 12.5% First Cape Devils Cove red wine, currently on a rollback at Asda for £2.48, would increase to at least £3.75. Or £4.69 at the upper limit.
As The Grocer revealed, a number of leading beer and wine brand owners have reduced abvs on their best-selling brands, including ABInBev, Heineken, Molson Coors, and Jacob’s Creek and First Cape wines on the wine side. The government wants similar action from retailers to address own label deals.