Duty review boosts production of low-strength beers
Introduced in August 2023, the Alcohol Duty Review meant drinks of 3.4% ABV and lower were subjected to lower tax, along with a new draught relief to support pubs.
The move saw more brewers invest in and produce lower strength products, leading to a shift in sales of lower strength serves in pubs and the removal of 100m alcohol units in just one year, according to the BBPA.
BBPA CEO Emma McClarkin said: “It is crystal clear a progressive alcohol duty regime that incentivises the production and consumption of lower-strength products over stronger, more concentrated products, can help grow the economy and support public health goals.
Impressive rate
“Brewers responded at an impressive rate, with an incredible choice of high-quality low strength and alcohol-free beers, delighting customers across the UK. It is vital that the new Government continues to take further steps in this direction.”
The BBPA also revealed 1.3 - 3.4% strength drinks have leapt from less than 1% of beer sales in 2022 to now more than 7%, while the no and low alcohol beer category has also seen “rapid growth”, accelerating to 2% of the overall market in 2024.
Moreover, some 90% of pubs now serve at least one no and low alcohol beer and almost 10% now serve a draught option, with further growth forecast.
The results prove when Government supports businesses, they can boost the economy and support public health goals, the association added.
However, the UK pays the second-highest duty rate in Europe, with Finland taking first place, and pays 12 times more than Spain and Germany, according to the trade body.
More choice
McClarkin added: “Beer is the lowest-strength alcoholic drinks category and UK brewing is a world-class manufacturing success story.
“However, UK beer drinkers continue to pay amongst the highest duty rates in Europe and brewers and pubs face eye-watering increases in the cost of doing business.
“The Government must use the Budget to cut beer duty to support our brewers and pubs, ensure a pint remains affordable for all, and help give consumers more choice.”
The final stage of the new regime is due to be implemented in February 2025, when lower-strength wines will be a taxed at a lower rate than stronger wines.
