'Drinkflation': Brewing giants make beer weaker but prices keep on rising

The alcohol level in many drinks has been reduced ahead of a incoming tax, ITV News Correspondent Rachel Younger reports

The alcohol content in some of the UK's most popular beers has been reduced in a bid to cut the amount of tax paid - but brewers are accused of not passing on the tax savings to customers.

According to the British Beer and Pub Association (BBPA), several beers, including Foster's and Old Speckled Hen, have cut their alcohol content by around 0.3% as part of a trend some are calling 'drinkflation'.

Lowering alcohol content reduces the amount of tax payable on the bottle or can, with most of the reductions saving 2-3p a sale.

At the end of last year, a can of Foster's was 4% alcohol and the tax duty payable on it was 34p, but in January this was cut to 3.7% with a duty of 31p.

Brewers in South London told ITV News Correspondent Rachel Younger that they are 'struggling quite a lot' with higher taxes on beer

Old Speckled Hen has been reduced from 5% to 4.8% and Spitfire Amber Ale has fallen from 4.5% to 4.2%

Yet, these tax savings have not been passed on to customers.

Colin Angus, from The University of Sheffield’s alcohol research group, told ITV News brewers cutting alcohol content to make savings "isn't a new phenomenon" but noted there has been more instance of this happening "in the past year or so" across the industry.

He said usually brewers do not do this to cut the price customers pay and is primarily done to recoup losses from hikes in production costs, which he said was "reasonable to assume" is what is happening now.

The price of barley has risen by 50%. Credit: ITV News

Mr Angus said he thought brewers were doing this for profit rather than "in the interest of public health" because the industry usually pushes against any anti-alcohol measures.

He said: "Unusually, the interests of public health and industry have aligned", with research pointing to people not being tempted to drink more beer when they consume weaker alcohol.

BBPA said brewers had faced significant increases in production costs in recent years, with the average cost of industrial energy doubling and the price of barley and wheat soaring.

Beer in shops has not been hit by the same double-digit inflation many foods have seen over the past year with only a slight increase in the past few months.

The average rise in food prices in supermarkets has been 24% but beer has only risen by 11%. 

Emma McClarkin, Chief Executive of BBPA said: "Unfortunately, whilst inflation is slowing, businesses and consumers are still very much feeling the pinch.

"Our industry will continue to work hard to mitigate the impact of costs to customers but we really need the government to step up and act on inflation before beer becomes a luxury, rather than the accessible, widely-enjoyed drink it always has been."

A spokesperson for Greene King, who produces Old Speckled Hen, said "external events" had significantly increased their costs and reducing alcohol content is one way to keep prices affordable.

Cutting alcohol content can keep prices from rising. Credit: PA

A Heineken UK spokesperson said: "We know consumers are increasingly choosing lower ABV products as part of a balanced lifestyle.

"Acknowledging this trend, we made the decision to brew Foster’s lager at a slightly lower ABV, reducing it from 4.0% to 3.7% at the beginning of this year."

Heineken also said they had faced a significant increase in production costs.

The cut in alcohol content could also reduce a significant income stream for the government.

If every brewer reduced the alcohol content of their beer by 0.3% then it would cost the government £250m in lost revenue.

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