Friday, 28 October 2011

Frightened of your own strength

RedNev pointed out this article about Health Minister Anne Milton giving evidence about alcohol policy to the House of Commons Science and Technology Committee. In this, she said in relation to High Strength Beer Duty, “Already, there has been a response from the industry. Already they are dropping the alcohol strength to get below that duty level.” Yet I have seen no evidence of that at all, and the new duty regime has been in place for a full month now. I’ve checked on the supermarket shelves, and Special Brew and Tennent’s Super are still there at 9.0%, and Gold Label at 8.5%, albeit at a considerably higher price than before.

I’m sure the brewers are watching the situation closely, but there seems to be a strange kind of ossification in this segment of the market, whereby established products continue to be brewed, but there is a total avoidance of any kind of product innovation – or indeed any advertising or promotion. Presumably they fear that, if they did so, the Daily Mail would be screaming down their necks. Yet the cask and premium bottled ale sectors seem to happily sail on under the radar, with a number of new launches of higher-strength beers like Old Crafty Hen and Pedigree VSOP.

If I was the brand owner of Carlsberg Special or Tennent’s Super, what I would be tempted to do is to keep the existing product at 9.0%, but introduce a new brand at 7.5% which would sell for considerably less, and let the market decide which prospered and which failed. Yet there’s no evidence of that at all. It will be interesting to see what happens over the next few months.

On a related subject, it’s long been my view that there is a gap in the mainstream beer market for a premium lager of around 5.5-6.0% ABV. However, for the same reasons, no major brewer would touch this with a bargepole for fear of denting their image of social responsibility. To some extent the Polish imports like Tyskie and Zywiec fill this niche, but there’s nothing brewed in this country. In a sense, when it was 5.2%, that little extra kick was a major selling point for Stella. A couple of years ago, the much-trailed launch of the 5.5% Stella Black was pulled, and the name was later used for a weaker “premium” brand extension which now seems to have died the death.

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