The government's plans to ban the sale of alcohol below cost are dividing opinion within the retail community.

Ministers announced last month that they would be setting the minimum price on alcohol as excise duty plus VAT.

The move effectively puts a floor of 38p on a 440ml can of lager and £10.71 for a litre of vodka. Production costs will not be included in the calculations.

Many retailers, trade associations and health groups have slammed the plans as "watered down", claiming that they will do little to curb aggressive supermarket discounts, or tackle the country's binge-drinking culture.

Londis retailer Dee Sedani from Etwall in Derbyshire thinks the plans would make "very little difference" to multiples' trading practices. He added: "They will just adopt new ways of making alcohol purchases attractive, such as offering free soft drinks with purchases."

However, some retailers backed the decision. Manny Patel, of Manny's in Long Ditton, Surrey, said he felt "optimistic" that the plans would provide a more level playing field on which to compete with the multiples.

Association of Convenience Stores chief executive James Lowman said the government had "ducked a tough decision".

"The biggest frustration is that the 'duty plus VAT' definition will satisfy no one, apart from the big supermarkets, and so the uncertainty and debate will continue to rage," he said. "Local shops and wholesalers were keen to see a workable ban that would provide certainty. We will continue to try to bring some common sense to this debate and find solutions to this problem."

A consultation on minimum pricing for alcohol is also being launched in Northern Ireland this month by social development minister Alex Attwood and health minister Michael McGimpsey.