The UK plans to ban retailers from selling alcohol at below-cost prices before the start of the FIFA World Cup finals this summer, in an attempt to limit excess drinking.
The Government has established 'cost' as the amount of 'duty plus VAT', defined as the level of alcohol duty (duty) for a product plus value added tax (VAT) payable on the duty element of the product price.
This guidance provides a single point of reference for suppliers of alcohol and local authorities in England and Wales for banning the sale of alcohol below the cost of duty plus VAT.
As per the new licensing restrictions, which are expected to come into effect from 6 April 2014, a standard bottle of wine should not be sold for less than £2.41.
The Wine and Spirit Trade Association (WSTA) chief executive Miles Beale said the WSTA welcomes the introduction of a below cost sales ban, which is supported by the industry, to deal with the worst cases of deeply discounted alcohol.
"We will be working with the Home Office to ensure that the guidance is widely understood and retailers have enough time to properly comply with the changes," Beale added.
On 23 March 2012 the government launched its Alcohol Strategy, which aims to radically reshape the approach to alcohol and reduce the number of people drinking to excess.
The Alcohol Strategy is targeted at harmful and hazardous consumers and aims to limit the impact on responsible consumers.
