UK: Carlsberg making its beer weaker ahead of duty increase

Carlsberg is making its beer weaker to save money as the UK Government prepares to raise taxes on alcohol by more than 10pc, The Telegraph reported on July 11.

The Copenhagen-headquartered brewer is reducing the strength of its Danish Pilsner from 3.8pc alcohol by volume (abv) to 3.4pc abv.

It makes Carlsberg the latest beer brand to weaken its brews to save money in an example of so-called ‘Drinkflation’ – when companies cut the alcohol content of their products but prices rise or stay the same.

Beer is taxed on its strength, so cutting the alcohol content can be an easy way for brands to save money.

It comes as drinks producers brace for an expected 10.1pc rise in the levies on alcohol from August.

Slashing the strength of its beer below 3.5pc will allow Carlsberg to take advantage of a new, lower tax rate for weaker drinks when alcohol duty rates change in August.

Currently, all beers above 2.8pc in strength pay a ‘general’ rate. However under the new system beers 3.4pc or less in strength will have to pay £9.27 per litre of alcohol in the product, compared to £21.01 for beers between 3.5pc and 8.5pc.

A spokesman for the brewer said: “In line with the Government’s Alcohol Duty Reforms, and as policy makers intended, reducing the abv of Carlsberg Danish Pilsner enables us to invest in innovation and in our portfolio of much-loved lagers and ales – while supporting public health by removing c.56 million units of alcohol from the UK market annually.”

Tax relief will also be introduced for brewers selling their beers on draught, which Chancellor of the Exchequer Jeremy Hunt announced in March as part of what he called a “Brexit pubs guarantee”.

Mr Hunt said this meant the draught duty on beer in pubs would be as much as 11p lower than that in supermarkets.

Carlsberg – whose Danish Pilsner is sold on tap, as well as in bottles and cans – is not the only brand to do this.

Fosters, Old Speckled Hen and Spitfire have all been made weaker over the last year as brewers scramble to cope with surging costs.

Fosters, owned by Heineken, dropped from 4pc to 3.7pc abv, saving Heineken roughly 3p of tax on every can.

Spitfire, meanwhile, was reduced from 4.5pc to 4.2pc by its owner Shepherd Neame, saving it 3p per 500ml bottle.

Old Speckled Hen, owned by Suffolk-based Greene King, fell from 5pc to 4.8pc, saving 2p per bottle.

All three brewers blamed the rising cost of raw materials and ingredients for them needing to cut costs. The cost of everything from the glass used in bottles, to aluminium for cans, and malted barley, has surged.

The Carlsberg spokesman added: “We did extensive consumer research, and we are confident our new brew delivers everything beer drinkers have come to expect from our well-balanced Danish Pilsner – crisp and refreshing, with distinct hop aroma – just crafted to contain a little less alcohol.”

The change to Carlsberg’s recipe comes four years after the brand completely relaunched its lager, reimagining it as a ‘Danish Pilsner’ in hopes of reversing a drop in sales during the last decade.

The increasing number of drinks brands getting weaker echoes the ‘shrinkflation’ commonly seen on supermarket shelves, where products’ pack sizes are made smaller but retail prices remain the same or rise.

Recent examples include Magnum ice creams, which reduced its four-packs to three-packs with no corresponding change in price in the supermarkets.

Carlsberg said last month it had found a buyer for its Russian business, which it promised to sell after Vladimir Putin invaded Ukraine last year. It did not give the buyer’s name or a timeframe for completion.

12 July, 2023