Cheap supermarket booze tipped to stay

Rebecca Williams says that supermarkets will continue to encourage bulk booze buying. Photo / The Aucklander

The sheer size of supermarket budgets means people will continue to be inundated with cheap alcohol promotions, despite a move away from "loss-leading", a campaigner against alcohol abuse says.

Alcohol Healthwatch director Rebecca Williams said supermarket chains such as Progressive and Foodstuffs remained "major suppliers" of alcohol, and the amount New Zealanders drink was continuing to rise.

"Power promotions" such as the stacking of cut-price alcohol immediately in supermarket doorways - accompanied by initiatives such as full-page newspaper advertising - made it "normal" to think in bulk when buying drink, she said.

"They are big retailers, so everything's big. They can afford to promote the liquor they sell. When people see price reductions, they do go in and buy copious amounts."

Ms Williams' comments came after the two supermarket chains this week announced an end to the practice of selling alcohol at below cost to attract customers, known as loss-leading.

The decision follows criticism from the Liquor Licensing Authority that loss-leading "promotes the abuse of liquor" and may breach the law aimed at reducing abuse.

Foodstuffs managing director Tony Carter told the Herald on Tuesday the company had stopped the practice, but went on to say loss-leading happened only about five times a year.

Abandoning it would not lead to alcohol price rises, he said.

Yesterday, Mr Carter reiterated that loss-leading had been purely "a response to competitive pressures", and while the company had until now had "no policy" on the practice, it was officially no longer condoned.

He rejected criticism of supermarket power promotions, saying the grocery industry was a high-turnover, high-volume business, which explained the bulk promotions.

Low-priced alcohol would continue to be available, and if the Government wanted to limit consumption, it could impose more taxes, he said.

The end of loss-leading was welcomed by Glengarry product manager Liz Wheaden, who said the practice had the potential to lower customer expectations at the same time as it "destroys" brands.

Loss-leading made customers come to expect to be able to buy a product cheap, Ms Wheaden said.

While her company had never used loss-leading, the practice had forced Glengarry to offer more variety and improved customer service to compete.