Duty down on low strength beers

The Government is to increase duty on beers over 7.5% abv but will reduce duty on beers under 2.8% abv at the next budget in March.

The Treasury today published its review of alcohol taxation report but duty remains unchanged on spirits and wines.

The review said the extra duty on high strength beer was aimed at targeting "the consumption of cheap, 'super strength' lagers that are also associated with high, and dangerous, levels of alcohol consumption".

It added: "Changes will also be made to introduce a reduced rate of duty on beers produced at an alcohol strength of 2.8% abv or below. This measure will help encourage the production and consumption of lower strength beers and give responsible drinkers additional choice."

It said the size of the duty increase on high strength beers and duty decrease on low strength would be about the same and further details would be set out in the draft Finance Bill on 9 December.

Campaign for Real Ale chief executive Mike Benner said the tax on beers above 7.5% was disappointing but was pleased with the news on low strength beers. "Reduced tax on low strength beers is good news for pub goers at a time when 29 pubs are closing every week. This move will incentivise brewers to invest in producing new low strength real ales packed full of flavour."

He said CAMRA would push for the 2.8% abv cap on a different duty rate, set by the EU, to be increased to 3.5%abv.

Welcome signs​

The British Beer and Pub Association welcomed the move. "We are pleased that the Government has decided to reduce duty for beer below 2.8 per cent," said chief executive Brigid Simmonds. "This will provide a welcome incentive for further investment in these beers, and encourage people to choose lower-strength drinks.

"There are also welcome signs that when it comes to beer and other lower-strength drinks, the Government recognises that moving towards duty based solely on alcohol content across all drinks would 'significantly penalise responsible drinkers'.

"It is also encouraging to see an explicit recognition that pubs are hit far more than supermarkets when it comes to duty increases.

"However, when it comes to the increase in duty on higher-strength beers, these account for less than half of one per cent of total alcohol sales, and less than one per cent of beer sales. Duty rates remain untouched for higher strength drinks such as spirits and wine.

"Overall, we need a duty system that nudges consumers to choose lower-strength, pub-based drinks such as beer. It would create a win-win situation — a more balanced system of alcohol taxation that would bring in more revenues, and create up to 30,000 jobs in the UK."

But Dark Star Brewery boss Paul Reed said: "Taking a blanket view on abv's is a farce. Applying these rules to craft beers such as Imperial Stouts is missing the point — our craft beer scene, and creativity in the sector, could be hit by this and these beers clearly aren't part of the problem."