Friday 30 September 2011

New duty rates on beer and a new glass size

From 1 October, beers over 7.5% ABV have to pay High Strength Beer Duty (HSBD) on top of the general beer duty. This goes for beers made in the UK and also those imported into the UK. It’ll be an additional 25% onto what the brewery already pays in duty.

Aimed to attack super-strength lagers and quell binging on park benches, the reality is that HSBD won’t affect its audience, but instead will hit the experimental brewers, the imported bottles we see in beer shops and more importantly, those of us who like to drink them.

Is Fuller’s Golden Pride the same as Tennants Super? Is BrewDog Paradox like Special Brew? What about Thornbridge Bracia or Robinson’s Old Tom? The elephant in the room is that these quality strong beers are lumped with the super-strength beers. Why can’t someone just be ballsy enough to say ‘these are the beers which are a problem and those ones are different’?

Anyone who relied on Special Brew to get bang for their buck will just step over to cheap cider or wine, whereas brewers who want to be innovative or experimental, or who already have stronger beers in their core range, now have a bigger price to pay just to be able to do so. And that price will have to hit us drinkers in the pocket. Who knows what’ll happen to the import duty paid on these bottles but I hope it doesn’t mean that some beers will no longer be available here.

The reality for the consumer is that the prices of these beers will rise around 25p for each bottle, can or pint.

At the same time as HSDB comes in, beers between 1.2% ABV and 2.8% ABV will have a 50% reduction in the duty rate, again this is for those made in the UK and imported.

As for this lower duty rate... If a brewery can make a great tasting 2.8% beer that’s got lots of body and flavour then I’m sure I’ll drink a pint or two, but not much more than that. I love the idea of low-ABV beers but in reality I wouldn’t drink them often. But at least this is a step in the right direction. If it’s supported by breweries then perhaps soon it could be raised to a more appealing 3.4%, but if no breweries make these low ABV beers then it won’t happen.

Also coming in on 1 October is the two-third glass, which will then be a legal measure. I like this introduction a lot and I hope pubs get on board with it. The two-third glass will be perfect for drinking beers over 7.5%, if you are wealthy enough to be able to afford to buy one...

Does anyone know any breweries making low ABV beers to get the low duty rate? Any pubs bringing in two-third glasses?

And what will be the consequences of HSBD on some of the stronger beers we see in the UK?


  1. I'm a little torn on the HSBD; in principle I can see the rationale behind scaling duty based on ABV but as you say, if the true aim is actually to target the Special Brews of the world then it pretty much fails on all fronts. The low ABV reduction is absurdly low; 3.4% - hell, even 3.2% - would have been a good level to catch (and promote) those lower strength, excellent beers already out there.

    But as long as it's only applying to beer, it's not going to address 'problem drinking'. If they were serious about that, the much mooted minimum unit price would seem to be the simplest and most effective as all those quality strong beers are already premium products and wouldn't be affected.

  2. Greene King Tolly English Ale, for a start. I honestly can't see 2.8% cask beers turning over enough to make them viable.

  3. It should be interesting to see what happens with the lower end of the ABV Scale, I'd quite like to see if brewers try to sneak a few beers in under 3%.

  4. obviously, totally agree on the tax issue. Ridiculous. And the lower end rate won't really do much - although it does seem to have kickstarted a spate of brewers brewing lower-end 'novelty' beers. The proof will be in how many of them keep at it, or how popular they are.
    As for the new measure - bring it on. More choice can only be a good thing.

  5. The low abv duty rate will only apply to brewers who pay the full duty rate, small brewers won't benefit from it anyway.

  6. JW Lees have a 2.8% beer too - and Skol is being dropped to 2.8% to take advantage of the duty reduction...

    I'm not sure that a pale 2.8% beer is the way I would approach it. IMHO, a dark mild can carry it off at that level though.

  7. I'd put my neck on the line and say that making a truely great beer under 2.8% is pretty much impossible. What's the point in that law, I don't understand it at all, completely pointles.


  8. "Skol is being dropped to 2.8% to take advantage of the duty reduction..."

    Says it all, really. My prediction is that, insofar as this has legs at all, most of the beer sold in the category will be bottom-end keg and canned lager.

  9. If the lower rate could just come up to include 3.0% then it would encompass the gorgeous Redemption Trinity - which is a great tasting beer.

  10. The prospect of paying more for strong beer and less for weak beer is not something I want, condone, or would vote for.

  11. For what it's worth here's our take:

    We actually spoke to the policy makers and asked them to consider legislation to cover bottom fermented lagers (capturing supermarket ‘super’ strength lagers) and not top fermented ales (leaving the world classics, and responsible drinkers, exempt. In response we got:
    "We acknowledge the distinction made between top fermented craft beers and bottom fermented lagers. However, Ministers have decided that the new duty will apply equally across the board to all beers exceeding 7.5% abv, whether they are supermarket own brands or imported speciality craft beers.”

    We were then pointed to “Article 4.8 in HM Treasury’s Review of Alcohol Taxation” which states that consumers of these niche premium products are not price sensitive because they choose these beers specifically for their taste.

    It's nice that the 'powers that be' are happy to penalise responsible drinkers to save the Tennat's Super strengh drinker - who won't buy cider instead (obviously).

  12. Curmudgeon - If the beers are good, then why not. I love Redemption's Trinity (3%) and will order it whenever I see it. As for others... we'll see.

    Leigh - Whether they stick around will be the test! For that they need to be good. It's hard to brew a good low ABV beer.

    Stuart - I didn't realise that! So there's no benefit for a brewery under 5,000HL to even bother?!

    The Beeralist - Hell yeah!

    Redpola - Amen!

    James Clay - What a bullshit response! You choose your niche lifestyle so you'll pay for it.

  13. From the 1st of October, we're only going to feature beer over 7.5% for a month - who's with us?

    I wonder which of the super-strength lagers will be the first to lower their abv to 7.4%? And how many days into October will it happen?

  14. yes Mark, the discount for low abv only applies to breweries that pay full duty.
    so all this talk about Redemptions lovely 3% beer is pointless.

  15. To be pedantic, HSBD will only apply to beers above 7.5% ABV, so the super-strength lagers can avoid it by coming down to 7.5%, not 7.4%.

  16. Puttingspacesinbetweenyourwordsmakesiteasierfor peopletoreadwhatyouaretryingtosay.

  17. Anon - Are you reading it online? If so, you'll see that every word is nicely separated with a space. If it's through a google reader or on mobile then I have no control over that.

  18. Well - actually you do - css can be tailored for mobile devices quite happily. Your site does do funny things on my Android (with Firefox) by the way... (and it scrolls really slowly on firefox on a PC - there's a lot of jscript overhead in the source for what should be a simple page...)

    ...anyhow, just seen from @FullersJohn that they are trialling a 2.8% beer too. "Mighty Atom" it's called apparently.

  19. Graeme - Most of what you just wrote seemed to be in a language alien to me... I use blogger. It makes it all simple for me.

    I did see John's tweet. Looking forward to trying it if I see it!

  20. @Graeme: unfortunately it is css in the post text that is messing with the rendering (on mobile and rss feed). It started with the "Exciting Times Ahead!" post. The posts are getting a class="MsoNoSpacing" and class="Apple-style-span" tags included in the paragraphs, and there are hard line breaks within the code (wherever there is a space missing, there is a hard break in the code). Mark isn't adding those on purpose, but they are getting added some how (either Blogger's editor is adding them, due to the browser Mark is using, or Mark is writing it in Word or some other program, that adds unnecessary mark-up, and pasting it in to Blogger's editor). The only post since "Exciting Times Ahead!" that has not had a spacing issue was the "Purkmistr" post, which lacks the added class and hard line breaks instances. Ah well.

    That's crap about the large increase in tax on anything over 7.5%.

  21. I think the new glass size is a good idea I'd like to see in pubs near me. You've probably already seen my thoughts on the beer tax....

  22. There are already excellent beers at 2.8% abv. If you haven't tried Harvey's Sweet Sussex then you really must.

    There are a few others and a major retailer is about to release a range of 'mid-strength beers' which I am personally looking forward to.

    On the >7.5% abv rules it's clearly preposterous for Government to decide which brands are troublesome, and as we all know the beer market is pretty fluid! I wish there was a way that the tax system could target problems in all walks of life but it's not that clever.

    So brewers of strong brews will continue to do so (at either a higher price or minimised margin) or they won't. I would happily bet that the UK beer drinker's beer range will not get any smaller!

  23. The first pint of a very low alcohol beer may taste fine but I soon need something with a bit more body. Perhaps emigration to Belgium is the answer where I'm still amused to see female drinkers of pensionable age enjoying an 8% Duvel at 10:00 a.m.

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  25. It's technically very hard for a brewery to hit the lower than 3% rate for beer. You can make flavoursome beer in this bracket but it's hard to do so and hard to make it consistent.

    There is little evidence on the spirits' freeze of how that has hampered with the problems of society. It's not even been hit like beer which I find rather staggering and appalling.

    Also there is the lesser known fact that NONE of the craft beers which we drink or infact barely any 7%+ beers are in the bars and clubs where tomfoolery and abuse occur. This is a FACT which has not been measured.

    They are doing this. Creating wealth from the people whom have beer to enjoy in a cafe culture. This is what they were apparently trying to promote. Dear Government, if you promote a culture you don't tax it!

    The other issue is the severe lack of research by the Government. Where are the research papers? Whom researched this project? As part of Freedom of Information Act I demand to view these papers.

    Let's get our 100k petition paper. I've sent a complaint to my MP about duty but my blog got zapped and the first paragraph is there on google but nothing else!

  26. @dave - I know - I assumed it was coming from the blogger theme that's in use. Either way, it doesn't do a lot for making the blog accessible to the largest number of possible readers...

  27. @Graeme- very true.

  28. @Mark - Me again about the problem with the spaces. Sorry for the facetious comment. I do read your blog through google reader, but I also read a lot of other blogs, including ones also hosted on Blogspot, and have seen this problem anywhere else. I have examined the HTML for your page and compared it to other blogs on blogspot. It appears as through the missing spaces happen at line breaks. Your HTML is a bit unique in as far as the paragraph actually have line breaks, whereas other blogs just let the have paragraps that scroll across and the formatting is handled in CSS.

    My guess it is probably the software you actually do the writing in that is removing the spaces and not blogspot. It could also be related to the different line spacerator characters on unix and windows.

    By what process does what you write actually get published? What software do you do the writing in?
    I knnow this may seem like a small bug, but im sure there is a way to stop it happening.

  29. Hi Mark,

    I agree with everything you've written, except the assertion that the duty will amount to 25p on every bottle, can and pint.

    The new rate of duty is charged at £4.64 per hectolitre for every percentage point of alcohol in the beer, so the increase in duty per bottle, can or pint is proportional to the volume of the container in which the beer is sold.

    Disregarding the high-ABV brews favoured by the typical park bench drinking enthusiast, the vast majority of beers that contain more than 7.5% ABV are sold in 330ml bottles. So, let's take a bottle of Brewdog Hardcore IPA at 9.2% ABV as an example:

    4.64 / 100000 (millilitres in a hectolitre) = 0.0000464 * 330 * 9.2 = 0.14 or 14p per bottle.

    If we were looking at bottle of Harviestoun Ola Dubh at 8% ABV, the duty increase would be:

    0.0000464 (as above) * 330 * 8 = 12p per bottle

    Brooklyn Black Chocolate Stout is sold in slightly larger 350ml bottles at 10% ABV, but the increase is still less than 25p:

    0.0000464 * 350 * 10 = 16p per bottle

    Apologies if this comes across as being patronising; it's not intended to be. Also, don't get me wrong: the duty increase sucks a big one, but it's not quite 25p per bottle.

  30. OK, reading that again, it does come across as being patronising, so let me summarise in a different way: I've seen this 25p per bottle/can/pint figure in loads of places, but the figures don't back it up. Am I missing something?

  31. A 500ml can of 9.0% super lager - by far the most common beer produced at this strength - will incur additional duty plus the VAT on that duty of almost exactly 25p, or £1 for a four-pack. That's where the figure comes from.

  32. Ah, so there's VAT on top of the additional duty? I didn't realise that. Fuck.

  33. Anon - Interesting and cheers for looking into it! I'm about as technical as a doormat. Not sure if I can change anything. If I did then I'd worry that it might bugger all posts. It's annoying! I write in word and then copy and paste in. Simple as that. I occasionally post direct from email (the Purkmistr post was that but I edited it after for styling and links). Let me know if it continues - you're the second person to mention it now...

    J - As Curmudgeon said, there's VAT on top of the additional tax. Plus shops and bars will likely have a standard profit margin. If that's 70% then you've got 15p tax, plus VAT, plus additional profit. It's a bastard! Cheers for doing the hard sums - I wasn't going to even attempt it so I made an educated guess! I tweeted Zak Avery about costs in his shop and the increase was between 25p and 75p a bottle.

  34. That IS a bastard. There was me thinking that it wasn't as bad as everyone was making out. The majority of beers that I drink fall into the high strength category; I much prefer to drink a smaller volume of a stronger, fuller flavoured beer than a pint of something that's around 4%.

    If you see any pictures in the near future of George Osborne getting the capped end of a bottle of Tokyo* rammed up his arse outside No. 10, that'll be me.

  35. Mark - re formatting issues. When writing it's probably best to write in plain text (via notepad perhaps) and then format the blog using blogspot in browser.

    But I may be wrong as that's my wordpress strategy and to my knowledge ours works well on most browsers. J/Dave if you think differently then would love to be better clued up!

  36. Now they're lowering popular ale's alcohol content in order to save a few pennies - it's austerity gone too far!