http://www.internationalsupermarketnews.com/news/4959
Following its recent evasion of the Scottish Government’s crack-down on cut-price alcohol, Tesco may soon be hit by a tax for selling tobacco in a number of its larger stores across Scotland.
The government’s new public health levy is aimed at larger retailers that stock both alcohol and tobacco, and as reported by the property firm Ryden, Tesco owns 90 of the 221 stores in Scotland sure to be affected. Property experts have warned that the levy, suggested by finance minister John Swinney, may force a number of supermarkets to stop selling tobacco in Scotland.
The government has set forth its plans to raise £110 million over the course of the next three years, and since Tesco has the highest number of stores with a rateable value of more than £300,000, it is estimated that the levy will cost them more than £38m.
Asda, Sainsbury’s and Morrisons, are also on track to pay tens of millions of pounds in additional business rates, but it is Tesco that will be hit hardest. In general, supermarkets which sell both alcohol and cigarettes will see a 22% increase in their rates bill, which averages out as an increase of £136,000 in 2012. In the first year of the new levy, it is predicted that Tesco will see £10m added to its rates bill payable in April.
However, there is the danger for Scottish consumers that the supermarket giant may simply stop selling tobacco in its larger stores across the country, in order to avoid the newly-imposed levy. A ratings specialist and partner of Ryden claimed that “Tesco will work out they don’t make £10m in profit on cigarettes. So they could easily clear their shelves and save themselves £10m in one fell swoop.”
The Scottish Retail Consortium has also reacted with anger against the public-health levy, saying that the figures proved that the Scottish government was really “picking the pockets” of the big four supermarket groups.
Short URL: http://www.internationalsupermarketnews.com/?p=4959