Examination of Witnesses (Question Numbers
320-339)
DR PETRA
MEIER AND
MS LILA
RABINOVICH
14 MAY 2009
Q320 Charlotte Atkins: Can I just
clarify something with Mr North? Is it not the case that all Tesco
stores have to abide by a centralised weekly direction from the
marketing department about where products should be located so
there is no discretion by the local store manager about where
they can put their products?
Mr North: There is always some
discretion on the part of the store manager about where they can
put products although, as you imply, the layout of stores is something
that has developed over time and on which there is quite a lot
of central direction. I would agree with what Jeremy said in reply
to a previous question, the very direct question of would we seek
to place alcohol either through central direction or a store manager's
discretion at the end of a children's clothing or children's product
aisle. The answer is we would not seek to do that either through
a central direction or, indeed, through a local manager's discretion.
Obviously if one is running a thousand or more stores then there
may well be regrettable cases where that comes about for one reason
or another but we would seek to act on those. On the question
about alcohol being sold at the store entrance, that is something
we sometimes do, or away from the alcohol aisle. That is something
you will see in our stores. Most customers who, as I have said,
purchase alcohol responsibly and consume it responsibly actually
find that helpful because it is something they can put into their
trolleys. I urge that we do not get into the business of thinking
that every customer who buys alcohol, whether on promotion or
otherwise, is likely to go and abuse that alcohol.
Q321 Charlotte Atkins: Could you
just clarify, is it correct that your marketing department does
actually issue centralised weekly direction to all your stores?
It is a weekly instruction about where products should be placed.
Mr North: Where products are placed
in stores is subject to a lot of central direction, yes, that
is right.
Q322 Charlotte Atkins: Would that
be on a weekly basis or is that more generally monthly or annually?
Mr North: It will depend.
Chairman: I have to say, I suggested
to the witnesses that we try and stick to the script a little
but that has gone completely awry in the last 10 minutes.
Q323 Sandra Gidley: We hear a lot
about voluntary codes and whilst I appreciate that off-licences
and very small outlets cannot be told not to display alcohol within
a short distance, there is no way they can work round that, most
large supermarkets could quite easily adopt a voluntary code on
this. Why is the supermarket sector not doing this? Mr North,
I think, he is from the supermarket sector.
Mr North: On which specific point,
sorry?
Q324 Sandra Gidley: Why do the supermarkets
not adopt a voluntary code on not piling them high and selling
them cheap at the store entrances when it comes to alcohol? You
can actually put the beer at the bottom of your trolley; it is
not that difficult.
Mr North: With respect, I come
back to the point I made about whether the vast majority of customers
purchase alcohol responsibly or irresponsibly, and our evidence
is that they buy it responsibly. If one were to adopt that sort
of a code we would have to say if you look in a supermarket of
a certain size where people on the whole are buying their weekly
shop does placing a promotion at a visible point encourage people
to abuse alcohol, I think we take the view that by and large it
does not.
Q325 Sandra Gidley: It encourages
them to buy it otherwise you would not put it there. I am not
saying whether it is responsible or irresponsible, but if you
accept that the vast majority of under-age access to alcohol is
from the stash in mum and dad's garage, the very fact that you
are tempting people with these products as they go in the stores
and that is the first thing they see, "I'll have one of those",
you would not put it there if you did not think you were going
to sell a lot more. Put aside for one moment whether it is responsible
or irresponsible drinkers buying it, we have an alcohol problem.
Why are the supermarkets not coming together with a voluntary
code to look as though they are trying to deal with this?
Mr North: I think what we do is
try and understand the impact of promotions. As I have said, most
customers buy alcohol responsibly and consume it responsibly.
In our store young people aged between 18 and 25 do not disproportionately
buy alcohol compared to other customer groups. Most customers,
and this is looking at alcohol sold on promotion, buy it alongside
their weekly food shopping and do not disproportionately buy it
on a Friday or Saturday evening, for example. Customers are attracted
to promotions and I would not say that they were not. Alcohol,
as your previous witnesses explained, remains something that for
most people is a significant financial purchase and, therefore,
promotions on alcohol are attractive. What we generally see when
people buy alcohol on promotion is that they trade up, and I think
that is many people's experience, that when alcohol is on promotion
they do not necessarily buy at the lowest price point, what they
see is an opportunity to try something that is at a slightly higher
price point. On your point about how much they then consume, the
other thing we see is that when customers buy alcohol from us
on promotion and we then track their subsequent purchasing over
the following weeks, their purchasing will fall over those weeks.
In other words, most people act sensibly, they buy alcohol on
promotion, they do use that as a basis for stocking up at home,
and then they consume it responsibly over a period of time.
Mr Beadles: The OFT has given
us very clear guidance on what we can and cannot agree within
a voluntary code. Where we can we have made those agreements.
One of the issues that the OFT has advised us on that we have
to be very careful about in a voluntary arrangement is the placing
of promotional activities within stores. It is a discussion that
we have had and the OFT has been very clear with us that there
is a line and the placement of promotional activities in stores
is a competitive and commercial issue and, therefore, a voluntary
agreement on that at this moment in time is something that they
advise us not to step over.
Q326 Chairman: What do you think
the effect would be of restricting alcohol promotion or otherwise
to one aisle as it used to be 10 years ago? What would be the
effect on sales?
Mr Beadles: There is some quite
interesting work on this. Morrisons has 11 stores in the UK that
for historical reasons have got separate alcohol aisles and ASDA
has provided some data from Northern Ireland where they have separate
alcohol aisles. What we see within those sales is it increases
the sale of alcohol. We think the reason for that overall is that
people who have to go through a separate purchase experience stock
up more. They are inconvenienced by having to go through a separate
area and a separate till and, therefore, they stock up more as
a result of it. What we see less of is people putting a single
bottle of wine in the basket on the way through; what we see more
of is bulk purchasing when they go into the separate area. The
stores that Morrisons attract outperform the rest of their store
network throughout the United Kingdom.
Q327 Dr Stoate: That is completely
at odds with the academic research we heard this morning that
was told to us by Sheffield University which says if you have
alcohol in a completely separate aisle you see reductions in consumption
by up to 40%. I find it very difficult to see where you get your
figures from.
Mr Beadles: Morrisons and ASDA
provided the statistics for the Scottish Government. It is from
their sales data. I am very happy to provide it to you.
Q328 Chairman: I would be very pleased
if you could do that. David, before we do move on to the script,
as it were, you mentioned the issue about people who would buy
wherever in your stores and would then buy less over the next
few weeks. I assume you know that on the basis of the use of loyalty
cards and things like that. Could you share any of that information
with us about how promotion affects it? Has anybody looked at
it independent of Tesco's? Could it be shared with the Committee
where these types of promotions do not, as a lot of people assume,
encourage more buying and potentially more consumption of alcohol?
Mr Beadles: We can certainly share
data that has been done across the entire industry which shows
the people who are most likely to buy into promotional activities
are ABC1 consumers over the age of 45 and the people least likely
to buy are DE consumers under the age of 28. This has got data
about their shopping patterns and how they behave thereafter.
That information is in the public domain so I am very happy to
provide it to you.
Q329 Chairman: Is there anything
in the public domain that shows the effect of promotions? David
said quite clearly that if some people are going to buy a three-for-two
on cans of beer or whatever, you know that they will buy less
the next time they are in. Have you got anything specific around
promotions to see what does take place when alcohol is sold in
that way?
Mr Beadles: Certainly ASDA, Morrisons,
and I think Tesco's, have provided data to the Scottish Government
that demonstrates people buy into promotions and then have a longer
period before they buy alcohol again. As it is public domain documentation
I will provide it to the Committee.
Q330 Dr Stoate: I want to move on
to the on-trade and I have a couple of questions for our beer
producers and consumers. We have got here a study that shows in
one nightclub medium consumption on any night out for men was
20 units and women 13 units. That was on one night out in one
nightclub. That is pretty frightening. I will start with you,
Jeremy. What is the trade doing to try and encourage responsible
drinking within establishments?
Mr Blood: The industry does a
lot and has done a lot over the last few years by funding the
Drink Aware Trust and looking at education. It is important that
educating people about being responsible on a Saturday night means
they are not massively receptive to that education, they have
got a different headset on, they are out there to enjoy themselves.
We genuinely believe that education, information, raising awareness
and changing the culture of people about binge drinking is something
that should happen with different interventions at different times.
We genuinely believe as suppliers and marketers of the product
we are not often the best people to do that educating. We lack
credibility and people say, "Why are you telling us to drink
less when you want to sell more?" It lacks credibility. That
is why we set up the Drink Aware Trust. We fund the Drink Aware
Trust but it is independent. We are delighted that we have got
independent health people working with us on that education message.
We are doing a lot there. We do an awful lot in the way we supervise
and manage licensed premises. We have done an awful lot on Challenge
21 and Challenge 18 in recent years. I recognise there is still
some way to go to improve the performance of the on-trade in that
area but I would also claim that there has been a big change in
the culture of under-age drinking.
Q331 Dr Stoate: I think you would
have to agree that someone having consumed 20 units is likely
to be fairly intoxicated.
Mr Blood: Yes.
Q332 Dr Stoate: You also know that
it is against the law to supply alcohol to somebody who appears
intoxicated.
Mr Blood: Absolutely.
Q333 Dr Stoate: How on earth can
a medium drinking level in one club be 20 units when people must
be the worse for alcohol and they must, therefore, by definition
be served alcohol when they are intoxicated clearly in breach
of the law? How do you possibly answer that?
Mr Blood: In recent years there
has been a real step change in the amount of education and training
of bar staff and licensees.
Q334 Dr Stoate: Yet they are still
serving drink in vast quantities to people who are clearly intoxicated.
Mr Blood: It is against the licensing
regulations and conditions they have got. At the moment there
is very limited enforcement of those regulations. I would see
it as a combination of education of our bar staff and licensees
and better enforcement. We would strongly support enforcement
of the licensing conditions that you should not serve drunk people.
Q335 Dr Stoate: The police need to
enforce against the abuses in the industry, is that what you are
claiming?
Mr Blood: The right combination
is education and information when people are receptive to it;
better training and responsible supervision combined with enforcement.
All three of those will be the most effective way. There is a
role for all participants: the Drink Aware Trust, which we fund,
that has the authenticity of being independent; our training and
raising our performance in our pubs; and enforcement. That will
help everybody behave and perform better.
Q336 Dr Stoate: Can I ask you about
"vertical drinking" establishments? What is your view
on vertical drinking establishments where effectively the evidence
is that people tend to drink more standing up?
Mr Benner: First, I would agree
with Jeremy about the importance of education and information.
The more information for consumers, the better. I think there
is a need for a cultural shift towards more responsible and social
drinking. CAMRA has never been a great fan of vertical drinking
establishments and there is a problem that they do dominate too
many of our high streets. The issue there is that they are usually
aimed at that younger high volume drinking group to turn over
as many sales as possible and that is often to the exclusion of
older people and families. Our interest is clearly about well-run
community pubs because the nature of a community pub is that it
applies to a cross-section of people and that creates that socially
controlled environment where people are more likely to drink responsibly
and interact with other people in the community. There have been
problems with that. Obviously where there are not enough seats
and where there is nowhere to put your drink, it is fair to assume
that is more likely to lead to an increased rate of consumption
of alcohol in those premises.
Q337 Dr Stoate: So CAMRA is not in
favour of vertical drinking establishments as a principle?
Mr Benner: No. We are a consumer
group, so we are about choice, and the great thing about the British
pubs market is that it is a very diverse market with lots of outlets
that appeal to different groups. Nevertheless, I think there is
a bit of a colonisation of our high streets at the moment with
those particular kinds of establishments to the detriment of community
pubs and the communities that they serve.
Q338 Sandra Gidley: I do not know
who can answer this, maybe Jeremy Blood or Mike Benner. When you
go into vertical drinking establishments, what is the average
consumption? We have had figures from one club but what is the
average consumption a night in a vertical drinking establishment?
Mr Benner: I do not have that
information, I am afraid.
Mr Blood: Vertical drinking establishments,
and I do not recognise or cannot categorise which outlets would
fall into that category, so it is not that I can tell you it is
these 2,000 outlets and this is the average consumption, are very
difficult to define. We do not run managed houses so we do not
have data capture per consumer of what they do.
Q339 Sandra Gidley: There have been
comparisons done with the average consumption of a vertical drinking
establishment compared to your more traditional pub which some
of us oldies round the Committee here might frequent.
Mr Blood: Sometimes the vertical
versus sitting categorisation is not always helpful. For some
town centre venues, when younger people go out for what we might
call higher energy Saturday nights there would be a higher rate
of consumption than if you go out for a drink on a Tuesday evening
in your local community pub, but those are choices that consumers
make about the mood they are in and what they are looking for
when they go out, whether it is a quiet chat with their neighbour
or friend or to watch the football or a fun night out in town.
To me why people choose to go out drives the different consumptions
on an evening, not whether it is vertical or not.
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