Tesco the worst wine retailer to work with in the UK—-and they sell 25% of the wine.

Worst, so says Harper’s.

In my off weeks from teaching, I have been studying a bit about the economics of alcohol sales in different markets.  I am interested in the UK, because that one seems the most chaotic.

When the dust settles on the Tesco financial reporting / income manipulation scandal, I think what people are going to discover is that the supermarket was using liquor, in some cases, as almost a loss leader to get people into the stores.  Then, they would have to pressure suppliers to take less, under the threat that if they didn’t, they wouldn’t get shelf space.    It is hard to imagine how anyone can justify two-for-one promotions of alcoholic beverages.

If you’re a Pennsylvania reader of mine, this is why we can’t trust alcohol sales to an unregulated, or so-called “free”, market.   You know what happens in these circumstances:  big players drive out the small ones, and then they call the shots (so to speak).  Look at the states where Southern Wine and Spirits is dominant, and don’t tell me that SWS functions as the liquor control board for those states.   They set the prices, and they say who is going to sell and how much, simply because of antitrust power.

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