Published: 10 July 2014
Q: I am a DPS and I understand that a new mandatory condition has been introduced regarding the pricing of alcohol and am wondering how this will impact on the running of my premises and the promotions that I can offer?
A: That is correct; a new mandatory condition came into force on 28th May 2014 which means that the sale of alcohol below the cost of duty plus VAT is now prohibited. The condition means that you will now be required to ensure that you calculate your prices to ensure that no alcoholic drink is being sold for a price which is below the permitted price.
The reality of this condition is that it will have very little, if any, effect on your day to day business, but you need to consider carefully the promotions that you offer as you rightly ask. The promotions to be considered could include anything from the sale of discounted drinks, multi-buy offers and all-inclusive deals you have in place.
It is still possible for you to run promotional offers alongside your standard pricing, but in each scenario you must ensure that the price of the alcohol does not fall below the cost of duty plus VAT, which in normal terms means that you must ensure that you do not sell any alcoholic drink below its cost price.
In relation to the promotions it is the price after any discount has been applied (including staff offers) which will be taken into account and so this must not be below the permitted price. In relation to all-inclusive alcohol, e.g. a bottle of wine included with a meal for a fixed price, then you must ensure that the fixed price is not less than the minimum price permitted for the alcohol.
If you are concerned with offering your customers a complimentary drink, for example if they have been waiting a long time for a meal or are not happy with the service they have received, then don’t be. The customer has not paid anything for this drink and so the minimum pricing does not apply here.
If any of your prices change as a result of the minimum price requirement then you should ensure that it is not just your tills which are updated with the new prices, but also any website, menus, price lists or promotional literature which you may have.
It is important that you ensure all of your staff are aware of the changes and the need to check the pricing accordingly if new products/promotions are offered. It is your responsibility as the ‘relevant person’ (along with the premises licence holder and any personal licence holder) to ensure that the minimum pricing requirements are being complied with. The Home Office has supplied some useful examples of cost price on various products which is available from its website
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