Health Committee - The Government's Alcohol StrategyWritten evidence from Waitrose (GAS 35)

1.0 Introduction

1.1 Waitrose—a trading division of the John Lewis Partnership—is co-owned by over 47,500 Partners (employees). Through our 277 branches in the UK and Channel Islands, we are a growing and successful British business that combines the convenience of a supermarket with the expertise of a specialist shop. We also operate a growing online business.

1.2 Our co-ownership model makes us unique to other supermarkets and enables us to act in the interests of society as opposed to being influenced by shareholders. This guides our approach to the responsible sale of food and drink which is based on our commitment to the wellbeing of the communities we trade in.

1.3 We welcome the opportunity to contribute to the Health Select Committee’s inquiry on alcohol. We have a long-term commitment to selling alcohol responsibly, we are therefore well placed to input to the development of future alcohol legislation.

1.4 Our written response focuses on the issues the Committee is considering which are most relevant to our business and our experience.

2.0 Executive Summary

2.1 There is widespread debate and concern about Britain’s drinking culture and the issues it poses to the health of the nation. We believe that a long-term and considered approach is required to fundamentally change the binge drinking culture. Retailers have an integral role to play in rising to this challenge at a national and local level.

2.2 As stated in the Alcohol Strategy, the majority of consumers drink sensibly and the alcohol industry makes a significant contribution to the UK economy. The Alcohol Strategy therefore needs to strike a balance between allowing people to buy and drink alcohol responsibly while also tackling irresponsible behaviour.

2.3 As well as focussing on the role that price and promotions can play in influencing behaviour, we are also extremely encouraged that the Government’s strategy incorporates education and community support.

3.0 Our Responsible Approach

3.1 Doing the right thing is part of the way we do business. It is at the heart of our industry-leading approach to positioning, pricing, labelling, selling and promoting alcohol to our customers. This includes:

Never positioning alcohol in our foyers.

Not including alcohol products in our entry level brand—essential Waitrose.

Never running 50% discount offers on spirits, still wine, beer, cider, ready-to-serve and fortified wine.

Always offering a non-alcoholic alternative in our Meal Deals.

Supporting Community Alcohol Partnerships through the Retail of Alcohol Standards Group (RASG).

3.2 We adopt a voluntary approach to informing our customers when they are purchasing alcohol. This includes comprehensive information on our website, unit information on our own label products and shelf edge ticketing. We were the first retailer to communicate alcohol units and safe limits in 2004. All our own label products now comply with the Department of Health’s voluntary labelling requirements.

3.3 We operate a Challenge 25 policy. We consistently monitor our performance in this area using Serve Legal to ensure that we have the most robust system in place for preventing any underage sales in our branches. We consistently review our procedures, retrain Partners twice a year and ensure that all Partners are aware of the importance of not selling alcohol to people who are underage. We also verify a person’s age when they place an order online and specify that someone over 18 must sign for the delivery of their online order.

3.4 We have Beers, Wines and Spirits specialists in our branches who can advise customers on the products we offer. Our beers, wines and spirits section has its own dedicated area of the shop in our core/large branches, as opposed to forming part of the main shopping aisles.

3.5 We are developing our range of low/no alcohol products, which includes the recent introduction of our Merlot grape juice, a light beer and a pale ale (both at 2.8% ABV). We are also aiming to reduce the average alcohol content of our range as part of our Responsibility Deal unit reduction pledge.

4.0 The Government’s Approach to Alcohol Policy

4.1 We do not believe that it matters where alcohol policy is set by the Government but rather how it is set. A coordinated and collaborative approach is key. For example, the Responsibility Deal needs to be inextricably linked to the Government’s overall Alcohol Strategy.

4.2 When it comes to the devolved administrations, we would urge a consistent and efficient approach to legislation. Major retailers manage their businesses centrally so the need to have regionally varied pricing systems causes businesses unnecessary cost and complexity. To lessen the financial burden on businesses of implementing the new legislation, consistent policy and legislation is essential. For example, the MPU cost calculation that will determine the lowest price for a product should be the same formula in England as in Scotland.

5.0 The Alcohol Industry’s Role

5.1 We fully accept that the industry has an important role to play in helping to tackle the binge drinking culture. This goes much further than adhering to basic licensing legislation and has been demonstrated by working with the Government to inform alcohol policy, financial contributions to Drinkaware, agreeing to, and exceeding, voluntary commitments and informing and educating our customers.

5.2 We are signatories of the Government’s Public Health Responsibility Deal and believe that we will only overcome the social and health harms of excessive consumption by working in partnership with the drinks industry, the Government and NGOs.

5.3 We include the Drinkaware Trust’s branding and messages in our communications with customers as we believe it is important to give consumers simple and consistent advice. We also support the Portman Code.

6.0 Minimum Price Per Unit

6.1 We are supportive of the Government’s proposal to introduce MPU legislation. However it is only part of the solution not the ultimate answer to tackling irresponsible drinking. To be effective it needs to be combined with restrictions on promotional activity, for example a ban on heavy discounts such as 50% off, and education to achieve the radical change the Government is setting out to achieve.

6.2 We do not have sufficient evidence to make an informed view about the most effective minimum price point. However, it is important that it is high enough to eradicate the irresponsible pricing practice that the Alcohol Strategy highlights while maintaining a price that doesn’t penalise responsible drinkers. More evidence is essential in determining the most effective price point.

6.3 We believe that restrictions on pricing and promotions will create a fairer and more sustainable market for the drinks industry. It will also help consumers to understand the true value of alcohol.

6.4 We would ask the Government to consider the practical complexities of implementing the proposed legislation, for example, we will need to develop fully automated systems. We estimate the time for delivery as 12–18 months so our preference would be for guidance to be issued as far as possible in advance of enforcement of the legislation. It would also be preferable to implement the changes outside of our busiest trading periods which are the new year, Easter and Christmas. It is worth noting that a heavy discount ban would be much less complex, and therefore much quicker, for retailers to implement.

6.5 We believe it is important to have a degree of flexibility in the MPU to ensure that the price point can be reviewed when there is substantial evidence to assess its impact.

6.6 We welcome the Government’s support for changes to the EU rules to allow duty to rise in line with alcoholic strength. The current tax points are set on a wide scale of 8.5 to 15% ABV so there is no incentive for producers to develop wines at 8.5–11.5%. We have seen that the tax incentive for beer has encouraged more suppliers to produce lower strength products.

7.0 Public Health Interventions

7.1 Educating and informing people about safe and responsible alcohol consumption is essential in achieving sustained behavioural change. Education should start at an early age through the school curriculum to ensure young people make responsible choices when they reach the legal drinking age.

7.2 We will continue to make information available to our customers to help them make responsible decisions but this must be strengthened by the bold and targeted government led marketing and education campaigns that the Alcohol Strategy refers to. We particularly welcome the Government’s commitment to invest £2.6 million in a youth marketing programme.

8.0 Marketing of Alcohol

8.1 The majority of our advertising does not focus on alcohol. However, if alcohol is included in our advertisements, it is alongside food to encourage people to consume alcohol responsibly. We always include the Drinkaware branding on any advertisements with alcohol.

8.2 We also include information and advice about alcohol in our customer publications, such as Waitrose Weekend. The focus is on the taste and quality of our range as opposed to encouraging excess consumption.

8.3 We do not believe that marketing restrictions are required if the Government effectively tackles irresponsible pricing and promotions.

May 2012

Prepared 21st July 2012