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| May 02, 2008 | COPYRIGHT 2008 Financial Times Ltd. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan.  All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)Copyright

(From Off Licence News)

Politicians of all parties, backed by the health lobby, have played on public and media concern about binge-drinking and anti social behaviour in recent years and used it to progressively marginalise the alcoholic drinks industry. Now they are raising the spectre of minimum pricing on alcohol.

The off-trade, dominated by the multiple grocers, runs a business model that pubs and clubs simply can' compete with - indeed, many top pub operators probably wouldn' want to.

The on-trade is definitely feeling the heat and the effects of the smoking ban and recent duty hike ha ve added to its list of woes.

The use of alcohol and its higher price and more premium positioning in the on-trade has been used by the off-trade to move volumes based on low prices - in the case of the grocers, to fill shopping baskets, with drinks just one element of the shopping list.

Off-trade drink is becoming progressively commoditised - especially beer.

Many multiple pub groups have expressed concerns that brewers and Agrocers are chasing off-trade beer volumes at the expense of price and margin, and this is becoming a major factor in the on-trade beer decline - almost certainly true.

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