Down with the discounts, up with speciality beers
Christine Boggis asked a cross-section of retailers and suppliers how they are dealing with increasing pressure from government and press.
Not a week - sometimes not even a day - goes by without someone launching yet another scathing attack on alcohol and alcohol retailing.
Two of the most recent complaints - Alcohol Concern's allegation that youngsters can afford to buy alcohol with their pocket money, and a shock revelation by the American Public Health Association that pop musicians drink alcohol and take drugs - show the kind of hysteria that surrounds this topic.
The serious message is that the government is becoming ever more anti-drinking, and the media has picked up on alcohol as the latest aspect of modern life to demonise.
Meanwhile, pub companies are having a field day blaming binge and under-age drinking on the off-trade.
RTDs, strong cheap ciders and even the nightly half-bottle of Bordeaux drunk by Mr & Mrs Middle-aged Middle England have taken some of the flak , but the real battle ground is cheap lager.
Supermarkets are still selling lager below cost as a loss-leader. While some specialists are moving away from competing on price deals, many cash and carries and off-licences are fighting every day to win custom away from the multiple grocers.
After all, cheap lager is the bottom line. Lager alone has a 22 per cent share of the off-trade drinks market, second only to light wine, which holds a 37 per cent share.
Can we keep selling lager off cheaply in England and Wales, or will the government step in and ban price deals as it has in Scotland?
Will any retailer or supplier be brave enough to change their practices voluntarily before they are forced to?
OLN asked suppliers and retailers how they are responding to government pressure, and whether they are changing the way they market and sell their beers.
Matthew Hughes, managing director, Bargain Booze
"I cannot see any imperative from our position as responsible retailers to alter the way in which we retail alcohol products. Increased purchase levels in the off-trade do not necessarily result in increased or unhealthy consumption levels, so in any event restriction on promotional pricing activity would be unnecessary and ineffective. Requests for such changes are also totally anti-competitive and should be seen as unacceptable.
"The government should be tackling demand, not supply - the industry has sharpened its act up considerably over the past few years to the point that any issues that may have previously existed have all but been eradicated."
Mark Johnson, owner, Celebrations Off-licence, Offerton, Stockport
"I wouldn't say I was changing anything dramatically. My criticism is of the multiples selling three cases for £20 or generally selling below cost, which encourages people to drink quicker. We avoid three-case deals because on price comparison we couldn't match it.
"We do cold cases of 24, 20 or 18 cans of beer, and offer services like carrying it to the car. I would say 98 per cent of my customers are responsible drinkers - they might drink more than the recommended daily units, but they drink sensibly at home. I don't think it's down to us to dictate how many units they can drink. The government should be looking at getting rid of discounts that don't promote responsible drinking."
CJ Antal-Smith, buying manager for beer, Asda
"Asda has been working on new ways to promote responsible drinking within the beer category for a number of years now. We are expanding our no and lower alcohol range and making a feature of it in our stores to meet growing demand and encourage responsible drinking. At the same time we are trying to educate our shoppers to look at beer in a different light, for example educating in terms of taste, flavour and food matching with world lagers, speciality beers and ales. This has been working very well to date and we'll continue to offer the best value on our range while promoting responsible drinking at all times."
Alan Dunn, owner, Open All Hours, Keswick, Cumbria
"When the supermarkets stop selling it I will stop selling it. The government are not going to change people's habits. I don't think we should sell booze below cost, it isn't in anybody's interest, and units of alcohol are very cheap when they are sold like that. I will never sell it below cost, I am here to make a living. I dare say the multiples can fund that sort of activity from the huge profits they make on other products, by driving farmers into the ground to subsidise their beer sales."
Mark Gerken, off-trade sales managing director, Scottish & Newcastle UK
"There is no getting away from the fact that the retail environment remains fiercely competitive as retailers search for increased market share, and that they continue to use the BWS category. At the end of the day what continues to attract headlines is the deep discounting of beer, wines and spirits, and while the majority of people enjoy the added value of that offer responsibly at home there nevertheless has to be a link for a minority that cheap alcohol creates social problems, and it is that element, the minority potentially spoiling it for the majority, that will attract government intervention as we have seen already in Scotland.
"There has been a lot going on within the retail environment that is targeted at responsible retailing and responsible drinking through education, such as putting alcohol unit labelling on packaging, Challenge 21 and also different types of promotions starting to emerge, like beer and cider festivals.
"As suppliers we are looking to move away from the traditional share gain strategy of promoting our long alcoholic drinks at the expense of a competitor's to growing the overall category, with initiatives designed to get away from the piling high and selling it cheap mentality. But I have to say that remains the domain of the retailer and they need to work out between themselves what role deep discounting has at these times of increased government attention."
Michael Cook, director of imported beer, Pierhead Purchasing
"I don't believe the speciality beer market will be affected adversely by the negative messages in the press. If anything the negative press has been helping the speciality beer market as consumers whose main concern is the taste, heritage, provenance and character of a beer are already starting to look at discounted beers as inferior products. I think this will continue and our speciality brands such as Coopers, James Boag's, Weltenburger Kloster, Alhambra, Quilmes and Jenlain will benefit by being positioned as premium products in comparison to these bland-tasting discounted beers that are brewed under licence in the UK."
Mark Cox, trading manager, Morrisons
"As a member of the Retail of Alcohol Standards Group, we take our responsibility with regard to selling alcohol very seriously. We aim to ensure that alcohol is sold in an appropriately responsible manner and all our stores operate the Task 21 scheme."
Paul Sullivan, marketing manager, Wadworth
"The communication of positive, reinforcing values is essential to distancing the beer category from potential excesses of behaviour and to drive value rather than differentiate by discount. Due to the very nature of our products, such as 6X and Horizon, ale has a slightly older profile with consumer penetration increasing significantly around the age of 30. Therefore the message for ale has to be sophisticated, sensible enjoyment and that the ambience and the company are as important as the product.
"Our positioning is not to be the cheapest in the marketplace and we hope that we can add enough brand values to prevent commoditisation of the category. It is important that the communication of brand values is kept consistent in both message and actions, there's no point in claiming one thing and doing another, which merely leads to confusion about what a brand, and in turn the category, stands for.
"There is a growing need to market products responsibly, especially 'controlled' products like alcohol to reinforce and maintain the credibility and integrity of the drinks industry."
Zoe Smith, marketing manager, Cobra Beer
"From day one we've positioned Cobra as a premium beer brand emphasising the quality of our products and have marketed it and priced it accordingly. We always retail responsibly and have never engaged in deep price cutting so don't anticipate any legislative changes on alcohol advertising or retailing affecting the way we work. We'll continue to target the discerning lager drinkers willing to pay a little more for quality."
Steve McAllister, managing director of take-home retail, InBev UK
"InBev takes responsibility by ensuring that commercial communications concerning our products do not encourage inappropriate behaviour, are not directed at those under the legal drinking age and promote drinking in moderation. To ensure a global standard, we have created a commercial communications code which sets out mandatory general principles and guidance on responsible advertising.
"The code covers not only advertising but also all forms of brand marketing and commercial communications, including sponsorship, outdoor events, promotions, website content, relationship marketing, consumer PR, packaging and labelling claims. We are also proactively training our staff on the code and independently auditing it."
Louise Smith, owner, The Jug & Bottle, Bubwith, East Riding of Yorkshire
"I don't do any promotions, I'm more of a higher class off-licence if you like. People don't come to me wanting bargain basement prices. We do real ale on draught into kegs and several hundred different bottled beers. Since I've been open I've always operated a 21 policy and the kids in the village don't try it on. I don't suffer with problems of under-age drinking."
