It hopes to challenge current UK tax law, which rules that consumers pay no VAT on ‘essential’ foods and drinks such as milkshakes, frozen pizzas and chips, but must fork out 17.5% on ‘luxury’ items such as smoothies and 100% fruit juices.
The offer will be available in all of Asda’s 347 stores until 29 September and is being supported by a billboard and print/press advertising campaign. As part of the campaign, Asda’s own-label one-litre bottle of smooth orange juice has been reduced from £1.33 to £1.13 and smoothie maker Innocent’s one-litre bottle of strawberry and banana smoothie has been reduced to £2.47 from £2.90.
“We have always said that current VAT law on fruit juices and smoothies doesn’t make sense,” said Paul Kelly, Asda’s corporate affairs director. “By rolling back the price of all 100%-fruit juices and smoothies, we’re rewarding customers for choosing healthy products, instead of penalising them, as the current law does.”
Earlier this year, Asda launched a petition on the Downing Street website calling for a rate cut, which so far has the backing of nearly 12,000 people. An additional 15,500 have signed petitions in store. A survey carried out by the company also found 70.5% of customers would be more likely to buy more fruit juice if VAT was removed.
“We are very proud to be Asda’s branded supporter,” said Jamie Mitchell, managing director of Innocent, which is also backing a rate cut. “This is a long-term campaign, but we’ve got to keep building the support and the awareness for it. A drop in price will see consumption patterns change.”