Earlier this week I spotted this interesting tweet from Will Hawkes:
The existing duty relief for beers of 2.8% and under has made virtually no difference to the market. The only widely available pub products that I know take advantage of it are Sam Smith’s keg light and dark milds and Alpine lager. Clearly a 3.5% cut-off would benefit a much larger section of the market, including high-quality products such as Hawkshead Windermere Pale, Hydes 1863 and Brakspear Bitter. It would also be likely that beers with an ABV of 3.6% or 3.7%, such as Greene King IPA, would be tweaked to bring them below the threshold. Going forward, most brewers would want to have a tasty 3.5% ordinary bitter in their portfolio.
Best rumour @GBBF - that the low alcohol tax threshold is going to be raised from 2.8 to 3.5 ABV. We shall see.— Will Hawkes (@Will_Hawkes) 9 August 2016
However, I wouldn’t expect to see a widespread reformulation of beers some way above 3.5%, such as Carling or Holts Bitter. In practice, people are reluctant to choose lower-strength beers purely on the grounds that they are cheap, and it comes across as something of a distress purchase. This is especially true in pubs, where drinks are often bought in rounds anyway. This has been abundantly demonstrated by the many failed attempts by brewers to introduce weaker bitters selling at a lower price than the standard bitter in their pubs. And there are no generally available weak draught lagers. So, while the government may see it as a way of encouraging us to drink weaker beers, I’d say it’s unlikely to lead to a major revolution in drinking habits.
While such a move may seem like a boon for the brewing industry, to my mind the whole concept of tiered beer duty is flawed. It introduces artificial distortions into the market, may inhibit the development of of low-volume craft products in higher strength bands, and puts higher-strength beers at an arbitrary disadvantage when no such penalty applies to much stronger wines and spirits. Surely a consistent across-the-board duty rate related to ABV, as we used to have, is the fairest and simplest arrangement.
And it will probably never happen anyway...