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UK Government sets 'floor price' for alcohol

The UK Government has confirmed that it will introduce new rules to create a 'floor price' below which alcohol would be banned from sale, in plans that could come into force as early as April this year, reports the BBC.

The news comes in a week when the Scottish Government faces an appeal hearing over its plans to introduce a minimum unit price for alcohol in Scotland, in a bid to stem the tide of serious consequences from alcohol abuse.

The UK Home Office announced yesterday that it plans to introduce new rules from 6 April 2014 that would seek to prohibit supermarkets and other stores from selling alcoholic drinks at a loss.

At present many supermarkets and cut-price alcohol retailers sell certain brands of alcohol at a loss in order to attract customers into their stores to buy other, more profitable items.

The Home Office proposal seeks to get around the legal challenges facing the Scottish Parliament, by using existing licencing laws to create a 'floor price' rather than by imposing a minimum price per unit.

The new scheme will require shop retailers to use a complicated formula based on the rate of alcohol duty and VAT in order to calculate the minimum price for a particular product.

The result is that a bottle of beer will retail for no less than around 50p, and a bottle of vodka at 40% alcohol by volume strength will be sold for no less than £10.16 per bottle.

Critics have argued that the change is too slight, because it will only affect a tiny percentage of the most highly discounted alcohol sales - estimated to be around 1% of total sales - and will only lead to a drop in consumption of 0.04%.

The Government responded by saying the move was designed to tackle the practice of 'pre-drinking', when revelers fill up on cheap supermarket alcohol before going out in bars and clubs.

Norman Lamb, a Home Office minister, said: "The Coalition Government is determined to tackle alcohol-fuelled crime, which costs England and Wales around £11bn a year."