Drinks watchdog Portman Group, which represents brands including AB InBev, Carlsberg, Heineken and Molson Coors, previously called on the Government to simplify the terms used to describe low and no-alcohol beverages.
British Beer & Pub Association chief executive Brigid Simmonds said the Government had missed the opportunity to give consumers greater clarity of low-alcohol beer labelling.
She added: “It is bitterly disappointing the Department of Health has missed this opportunity to give consumers greater clarity when it comes to the labelling of low-alcohol beers.
“Changing the current definition of ‘alcohol-free’ beer from 0.05% ABV to 0.5% ABV as we suggested during the consultation process would have brought the UK in line with the rest of Europe and other global markets.
“This creates the perverse situation whereby beers at 0.5% ABV produced in Europe can be sold in the UK as ‘alcohol-free’, but British brewers brewing at the same strength must label their beer differently. This discrimination will create confusion for consumers.
“While we have already seen significant growth in the low-alcohol beer sector, the Government has failed to implement changes that would enable Britain’s brewers to further innovate and promote lower strength drinks to stimulate this growth further."
Simmonds added: “A decision by the Australian Government to introduce tax reductions for ‘lighter’ beer has already led to growth of such beers to occupy 25% of the market there.
“Sadly then, this decision by the UK Government represents a missed opportunity to provide a similar incentive here and gives no encouragement to those seeking to moderate their alcohol consumption.
“There is plenty of evidence to show moderate drinking brings health benefits and beer, which is typically a low strength form of alcohol, is a great way to enjoy a well-earned drink while supporting your local pub.”
Portman Group chief executive John Timothy called the current descriptors “outdated and confusing”.
He added: “We are disappointed by this outcome as it is a huge missed opportunity. Clarity and consistency on descriptors would have brought the UK into line with the rest of Europe, creating a level playing field for our drinks producers as well as giving consumers greater clarity around what they are buying.
“Producers continue to invest heavily in the development of new and exciting low and no-alcohol products but this risks being undermined by an insistence on retaining outdated and confusing product descriptors.