It will be significantly cheaper to see in the New Year with a bottle of champagne as 2016 closes, as UK shoppers can pick up a bottle of champagne today for as little as £8.

Aldi has reduced its Veuve Monsigny Champagne by 20% to £7.99, while Tesco, Morrisons, Asda and Lidl are hot on its heels.

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Tesco has two brands of fizz for less than £10: the supermarket's Andre Carpentier and Louis Delaunay champagnes for £8. And Marks & Spencer, a case of 12 bottles of Louis Chaurey Champagne is half price, at £99 – just £8.25 a bottle.

One reason behind the cuts, according to the Daily Mail, is the desire to ward off competition from prosecco, which has been eroding champagne's market share.

But leading supermarkets also appear to be using champagne as a loss leader, as these discounted prices are very unlikely to be profitable.

Cheap champagne has been a Christmas staple for several years now, but the bottom level for prices in supermarket special offers has previously been £10 or £9.99. Even at those prices, profits would have been meagre or non-existent. Therefore the aim of this season's cuts is to lure customers in through the doors in the hope that they will buy more lucrative items during their visits.

Supermarkets are also saying that they are making price cuts across all of their luxury food and drink products. Aldi states Veuve Monsigny accounts for one in every 12 bottles of champagne purchased in the UK. And it's not cheap plonk, according to Which? Magazines, which named Veuve Monsigny as one of its "Best Buys for Christmas 2016", ahead of Laurent-Perrier and Moet & Chandon.

Meanwhile, a Tesco spokesperson claimed that a price war had not broken out, insisting that £8 champagne has been on offer from 28 December, prior to Aldi's intervention. The spokesperson went on to deny that the offers were prompted by the supermarket having excess stock, stating that they were part of planned seasonal price reductions.

He said: "We are offering customers great deals on champagne, prosecco and on spirits. This is something we have been doing across the whole festive season and across all product areas."

Similarly, Morrisons pointed out that its Veuve Devanlay was reduced on 21 December, prior to Aldi's offer.