Surprise as whisky chief backs ban on 'loss leader' booze from supermarkets

Published on Saturday 29 May 2010 14:34

THE coalition government's controversial plans to crack down on cut price supermarket alcohol deals have received the surprise backing of Scotland's whisky industry.

The Scotch Whisky Association (SWA), which has been a vociferous campaigner against minimum pricing proposals in Scotland, will today throw its weight behind the Westminster policy.

Gavin Hewitt, chief executive of the industry body, says signs that the Conservative-Liberal Democrat government will ban supermarkets from selling spirits, beer, wine and cider below cost price are "extremely encouraging". Hewitt has also welcomed proposals to overhaul the way alcohol is taxed in the UK.

"They are very significant developments," Hewitt told Scotland on Sunday. "We would entirely support any activity to ban the selling of alcohol below cost. (The proposed] tax reform is even more interesting. We believe alcohol should be taxed according to alcoholic content – we are comfortable with that."

Last week, Tesco chief Sir Terry Leahy surprised health groups and rival supermarket bosses by calling on the coalition government to examine minimum pricing – a policy that the SNP government is trying to push through the Holyrood Parliament. Leahy's assertion that Tesco would support "any future discussions on a minimum price for alcohol" sparked a backlash from rivals, in particular Marks & Spencer chairman Sir Stuart Rose, who branded it "insane".

Hewitt said that although the SWA remains vehemently opposed to minimum pricing, the initiatives laid out so far by the coalition government had given him cause for optimism.

"It's the first time ever we have seen some movement on these issues," he said.

The SWA today publishes a report highlighting the economic value of the whisky industry to Scotland. The impact study, produced by Verso Economics, shows Scotch whisky is worth 4 billion a year in added value. The industry also supports other parts of the Scots economy by spending more than 1.1bn on home-produced supplies such as cereals – a 61 per cent increase in spending since 2000. The value of exports has also jumped by 42 per cent since the millennium.

Hewitt said that in employment terms, the industry supports 35,000 jobs, with one fifth of positions in economically "fragile" rural communities in the Highlands and Islands.

The SWA has commissioned the report to remind policymakers of the economic importance of the industry as the SNP administration continues its campaign on minimum pricing. Hewitt met First Minister Alex Salmond last week on the same day as a report by Holyrood's health committee showed MSPs were divided over the benefits of a minimum price for alcohol.

"Our opposition to minimum pricing is as strong as ever and we will continue to take that line," Hewitt said.