Strange but true. In depriving workers the right to strike, in a dispute over pay and conditions, a Lithuanian court this week ruled that Carlsberg is as “vitally essential” as water and medical equipment.
In the UK, the court of David Cameron is not proving quite so helpful, especially to the drinks trade. A briefing to the nationals at the weekend suggested that minimum pricing of 40p-50p per unit was a fait accompli.
The implications of such a move in terms of cutting binge drinking are debatable, but for the pricing architecture of the UK drinks trade, they are very significant. As we reveal, at least 10% of all the alcoholic drink SKUs for sale in the big four this week would need to increase in price. And more than a third if the minimum were at the upper 50p limit. Some would need to double or even treble in price.
While cider would be hardest hit, in percentage terms, the number of spirits impacted would be far higher. We could kiss goodbye to 3-for-£10 wine deals. And remember, this is a quiet week. In peak promotional periods such as Easter, the European Cup and Christmas, the volume of deals falling foul of a minimum price would soar.
As lobbyists and lawyers prepare to challenge any possible minimum pricing legislation, therefore, suppliers are apoplectic - even though they might actually benefit. However, the saving to supermarkets would surely be higher still, as they invariably subsidise the deals most likely to come in below David Cameron’s sub-40p radar.
And that’s what makes minimum pricing of significance to the entire trade. If it is introduced, the fixture will resemble a traffic jam, with a multitude of brands and own-label products queueing up behind David Cameron’s police car. This will do two things: it will make volume-based savings redundant (pleasing the government), while putting extra emphasis on the strength of a drink’s branding (pleasing marketers).
And if booze no longer acts as a footfall driver, supermarkets will either be able to pocket the extra money or, more likely, subsidise something else. fruit and veg, where margins are strong, would be progressive. But if I were to bet, expect further subsidies on fuel.