"Definitely British Beer... But Why Doesn't It Get You Drunk?" Alcohol Content Secretly Lowered

Controversy Over 'Tricks' to Pay Less Taxes

British beer companies are facing controversy for lowering alcohol content without informing consumers in advance. Suspicions have been raised that companies are using this tactic to pay less tax while keeping beer prices unchanged.

On the 20th (local time), the UK Daily Mail reported that popular beer brands have been reducing their alcohol by volume (ABV) without notifying consumers beforehand.

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According to the report, Foster’s, a popular beer in the UK, lowered its ABV from 4% to 3.7% earlier this year, and Old Speckled Hen reduced its ABV from 5% to 4.8%.

Shepherd Neame, the oldest brewery in the UK founded in 1698, only recently disclosed that since March it has lowered the ABV of its bottled beer Spitfire from 4.5% to 4.2%, and its ale Bishops Finger from 5.4% to 5.2%.

"'Tax reduction' trick in preparation for changes in alcohol tax policy"

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Locally, there are claims that the brewing industry is using this tactic to reduce taxes in anticipation of changes to the UK alcohol tax policy coming into effect in August.

Until now, UK tax authorities have differentiated taxes based on three tiers of alcohol content for the same volume of alcohol, with higher ABV incurring higher taxes.

However, the new alcohol tax regulations have further tightened the tax imposition based on ABV. It is pointed out that beer companies lowered the alcohol content without informing consumers to avoid tax burdens.

Under the new rules, if Bishops Finger maintained its previous 5.4% ABV, it would have to pay 52 pence (about 740 KRW) in tax per 500mL bottle, but by lowering it to 5.2%, the tax drops to 50 pence (about 715 KRW), saving about 25 KRW per bottle.

The media also cited an interview with Colin Angus, a researcher at the University of Sheffield, stating, "If all breweries reduce alcohol by just 0.3%, they could save about 250 million pounds (approximately 410 billion KRW) in taxes." While the amount per bottle or can may seem small, the large volume of beer consumption means the total tax savings are significant.

Beer companies: "Rising consumer price index causing significant difficulties for brewers"

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The problem is that companies reduce tax and thus lower production costs but keep beer prices the same, so consumers do not actually benefit.

This behavior has even led to the coining of the term "drinkflation." It is a type of "shrinkflation," where companies maintain product prices but reduce size or volume during inflationary periods, specifically used when the product is an alcoholic beverage.

On the other hand, beer companies have explained this by citing increased production costs.

Emma McClarkin, CEO of the British Beer & Pub Association (BBPA), told CNN, “Although inflation in the UK has somewhat eased, price increases across the supply chain continue, causing significant difficulties for brewers. It appears that brewers have chosen to adjust alcohol content as a way to prevent beer prices from rising.”

In fact, the UK consumer price index recorded an 8.7% increase as of April. Numerous breweries have closed due to business difficulties. According to Beer Nouveau, a well-known UK beer company, over 80 breweries went bankrupt in 2022, marking a record high on an annual basis.

CNN reported, “While the UK consumer price index has improved compared to when it surpassed 10% last December, reaching a 40-year high, the UK does not appear to have fully escaped an unprecedented inflationary phase,” adding, “The UK’s high inflation rate remains the highest among the Group of Seven (G7) countries.”

Greene King, the maker of Old Speckled Hen, cited inflation, explaining that “this measure is due to increased production costs such as raw materials, packaging, and energy prices.” This effectively acknowledges that the alcohol content was lowered to reduce costs, including taxes.

Meanwhile, Shepherd Neame claimed that “consumers are increasingly preferring beverages with lower alcohol content as they pursue healthier lifestyles.”

This content was produced with the assistance of AI translation services.