The European Commission currently defines low-strength beer for tax purposes as below 2.8% ABV. As a result, the UK Government introduced a lower tax on beer with an ABV of 2.8% or below in 2011. However a proposal by the European Commission would see beers with a strength of up to 3.5% ABV receiving additional duty relief.
The BBPA believes the move will help grow the lower-strength alcohol market, creating an incentive for significant investment and innovation in the category.
Potential to 'grow the market'
BBPA chief executive Brigid Simmonds said that lower-strength beers are “a great way to enjoy sensible drinking while supporting your local pub”.
“While it is possible to produce some great beers at 2.8% ABV, there is much more potential to grow the market for lower-strength beers if the threshold is increased to 3.5% ABV,” she said. “Under the complications of the European Structures Directive, the UK system of taxing beer by ABV is a real disadvantage for producers and reduces consumer choice.
“I very much welcome the proposed extension of the low-alcohol threshold by the European Commission and will push for parliament to adopt it, which should boost investment and innovation in the industry for low and no-alcohol beers.”
Portman Group sets its stall
Meanwhile, earlier this month, Drinks watchdog The Portman Group urged the Government to simplify the terms used to describe low and no-alcohol beverages and provide “much-needed clarity and consistency”.
There are currently four descriptors that outline products containing low or no alcohol and, with the current labelling laws due to expire at the end of the year, the Government has launched a consultation to consider if the descriptors still resonate with consumers and the trade.
The Portman Group’s recommendations include raising the ‘alcohol-free’ threshold to 0.5% ABV from 0.05% ABV, introducing a minimum strength of above 0.5% ABV to the category of low alcohol to go up to and include 1.2% ABV, and removing the term ‘de-alcoholised’ from use.