August 2010

What’s the Cost?

Banning below-cost selling of alcohol is not the easy panacea that it may seem

A LOT OF CONCERN has been expressed recently about supermarkets selling alcohol below cost, so the new government have said that they will outlaw the practice. But, when you look into it, it’s not as simple as you might think, and there’s no guarantee that it will prove to be the panacea some imagine. While a certain amount of below-cost selling undoubtedly goes on, there’s probably a lot less than may appear, as many of those low prices will be result of the supermarkets exercising their bargaining power to extract eye-watering discounts from suppliers.

There’s also a question mark as to whether such a ban could make it impossible for retailers to slash prices to shift surplus or short-dated stock, with the result that perfectly drinkable products would end up being poured down the drain. That might lead to a move to make producers of alcoholic drinks that weren’t guaranteed best-sellers supply their products on a sale or return basis, making it more difficult and risky to get unusual or specialist products on the shelves and reducing choice for consumers.

It’s not even straightforward to define what “cost price” is. The government have put forward four different options for consultation. One, just defining cost as duty plus VAT, is seen by many as too low as it excludes any production or distribution costs. Another, defining it as the invoice price paid, would mean opening up retailers’ accounts to expensive and time-consuming audits. And the remaining two simply seem to give the industry carte blanche to define cost themselves, thus creating a cosy price-fixing cartel that would effectively end price competition at the lower end of the market.

Vaulting into the Lounge

Getting rid of separate rooms in pubs doesn’t turn customers into one big happy family

MANY YEARS AGO, the vast majority of pubs had a separate public bar – round here generally called a vault – and lounge, reflecting distinctively different groups of customers who used them. But, over the years, this division has steadily been swept away, reflecting a supposedly more democratic and egalitarian society, and a desire to use the space in pubs more flexibly. Nowadays, it’s relatively rare to find a pub that does have a completely separate vault, although some do have a plainer section at one end of their drinking space.

But that doesn’t mean that the customers have become homogenous too, and sometimes you end up with the former vault customers in effect colonising the lounge. Now, there’s nothing wrong with a bit of boisterous behaviour and robust banter, and indeed in the past that “vault trade” was the heart of many pubs. But if that’s what you encounter when walking in through the front door in search of a quiet pint or a bite to eat, you may well think you’ve wandered into the wrong place. Indeed there’s one pub I can think of that still has a perfectly serviceable separate vault, but where all the vault-type customers congregate on the lounge side, leaving the vault empty.

Setting aside separate sections of a pub for different groups of clientele is something that has a practical justification of keeping everyone happy and is nothing to do with antiquated class divisions. Many pubs, for example, would benefit from having a separation between areas where children were permitted, and areas that were adults-only. And, during the recent World Cup, many potential customers might have appreciated a football-free zone.