Brewers innovate as duty on low-strength beer is cut

22 November 2011 by
Brewers innovate as duty on low-strength beer is cut

Good news often seems hard to come by in the beer and pub industry, but at the end of last year, in an uncharacteristic moment of largesse, George Osborne handed out a reduction in duty on lower-strength beer.

Although perhaps "largesse" is the wrong word. In fact, the reduction applied only to beers with a strength of 2.8% abv or below - very low in the world of beer, affecting only a very small segment of the market as a result. And it came at a price - a concomitant increase in duty on beers over 7.5%, in an apparent sop to the increasingly powerful health lobby.

That reduction - the equivalent of around 35p on a pint - came into force earlier this month. But despite the lukewarm reaction to the move, which has seen several pub and beer groups - including the British Beer and Pub Association (BBPA) and the Campaign for Real Ale (Camra) - call for the duty threshold to be raised to 3.5%, brewers have already started to innovate.

The past few weeks have seen several announce new beers at 2.8%, or reduce the alcohol in existing beers that already have a relatively low abv down to the 2.8% threshold - Carlsberg's Skol being one such example.

Beer writer Melissa Cole, author of Let Me Tell You About Beer, indicated that turning consumers on to weaker beers, regardless of the lower price, would be a challenge.

"You have to be a very skilful brewer in order to get the right level of flavour that isn't overwhelmingly bitter in a beer of that strength," she said. "Hops to a beer are like salt, pepper and herbs to a chef. You are in danger of overwhelming your base product because a 2.8% beer is so very light and very delicate."

But provided brewers got it right Cole did expect weaker beers to benefit rural pubs, where customers might feel more willing to go out if they felt confident they could drink a pint and stay under the drink-drive limit.

Her concerns over flavour were shared by Stephen Goodyear, chief executive of London-based pub company Young's, who nonetheless did not rule out the prospect of serving weaker beers in his pubs: "It has some merit but it all depends on the liquid, really," he said. "If there is a good taste delivery on the liquid then I think it will do quite well but I have always found that really low strength beer doesn't taste of a great deal."

An increasing number of brewers do seem willing to take up the challenge, though. Last week saw London-based brewer and pub firm Fuller's launch Mighty Atom, a 2.8% which employs no less than five different hops to bring in "floral grapefruit and plum notes, with a spicy overtone".

"Clever use of hops has been the key - by combining five different varieties at different stages of the brewing process we have managed to create a depth and array of flavours and aromas which allow Mighty Atom to stand side-by-side with stronger beers," Fuller's head brewer, John Keeling, said.

The beer will be trialled across 20 pubs and Fuller's hopes that the lighter drink will appeal to lunchtime drinkers. It should also benefit from being around 30p a pint cheaper than existing brands. The idea is that the beer will eventually be made available to the company's entire estate, before it rolls out to the free trade and national account customers. But a spokesman at the company admitted they still had little idea of how well customers would take to the beer, or whether it might eventually rival other more established, stronger beers.

One brewer that has a slightly better idea on this front is Manchester-based JW Lees. Last month saw the introduction of two new 2.8% beers from the brewery - Greengate Lite, and a lager, Golden Lite. A spokeswoman for the company said that the reaction from customers had been positive so far, with several commenting on their surprise at how much flavour the beers carried compared with their stronger equivalents. One or other of the beers is currently available in around 15% of the firm's 173 pubs, with plans to bring that to 25-30% in the near future, as well as making it available on JW Lees' free trade accounts.

While there is no definitive list on how many beers below 2.8% currently exist - and it is still early days - if the attempts of brewers such as Fuller's and JW Lees, among others, succeed in popularising unfashionably weak beers, many more may decide it is worth entering the market.

Beer brands at 2.8% or below
Greengate Lite - JW Lees (2.8%)
Golden Lite - JW Lees (2.8%)
C2 - Molson Coors (2%)
Manns Brown Ale - Marston's (2.8%)
Mighty Atom - Fuller's (2.8%)
Skol - Carlsberg (2.8%)
Sweet Sussex - Harvey's (2.8%)
Sweeetheart Stout - Tennents (2%)
Whitbread Best Mild - AB InBev (2.8%)

By Neil Gerrard

E-mail your comments to Neil Gerrard here.

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