AB-InBev are reducing the ABVs of some of their beers in the UK. Budweiser, Stella Artois, Beck’s are all going from 5% down to 4.8% in the on- and off-trade. Theyaren’t alone on this decision – Carlsberg Export and Cobra are doing the same. They say this is because of ‘market dynamics’, ‘evolving trends’ towards lower ABV beers, or for ‘refreshment’. But is that really the case?
Beer tax in the UK is a complicated bastard. As well as having steps dependent on brewery output, each 0.1% of ABV makes a difference to the amount of duty a brewery pays on each keg, cask or bottle. The reality with those beers which are being dropped in ABVs is that they will save about 2p per pint. So a 50 litre keg will save more than £1.60 in duty. Will this saving be passed on to the drinker? (In off-sales alone, this drop couldsave AB-InBev £8.6m. And that’s just for Stella. Which used to be 5.2% ABV - I guess I missed that reduction...)
So how will these beers be made? You can be pretty certain that they won’t be brewing new versions of these beers to save the 0.2% in ABV, instead they’ll be brewed exactly the same and then they will ‘liquor back’ to the desired ABV (See: high gravity brewing). So as well as saving cash in duty, they will also be producing more volume from the same ingredients and brewing process so will have even more beer to sell.
It’s not likely that any drinker will notice the difference in flavour. The more relevant thing to think about is the perception of the beers because these are flagship brands. At 5%, they have a premium association to them, so will this reduction see drinkers looking for another 5% beer or will they carry on drinking? And will other big brands follow and lower their ABVs? If so, are we seeing a massive change in lager in the UK? And does that mean more opportunities for quality keg beer and cask beer as drinkers move away from the global brands?
These are some of the great beer brands of the world. Beer sales might be falling, bottom lines might be getting tighter, but seeing these beers cheapened is a real shame.