Carlsberg reduces alcohol in beer before duty increases

Carlsberg has made its beer weaker in order to save money, as the government prepares to increase alcohol taxes by more than 10%.

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

Carlsberg is the latest brand to reduce the alcohol in its beer to save money. This is an example of ‘Drinkflation,’ when companies lower the alcohol content but the prices increase or remain the same.

As beer is taxed based on its alcohol content, reducing the alcohol content of a brand can help it save money.

The announcement comes as the beverage industry prepares for a 10.1pc increase in taxes on alcohol that is expected to take effect August.

Carlsberg can take advantage of the new lower alcohol tax rates for weaker drinks by reducing the strength of their beer to below 3.5pc.

All beers with a strength above 2.8pc pay the ‘general rate’. Under the new system, beers with a strength of 3.4pc will pay £9.27 for every litre of alcohol. This compares to £21.01 per litre for beers that are between 3.5pc to 8.5pc.

According to a brewer’s spokesperson, “in line with the Government’s Alcohol Duty Reforms and as intended by policymakers, reducing the Abv of Carlsberg Dutch Pilsner allows us to invest in innovations and our portfolio of well-loved ales and lagers – while supporting the public health through the removal of c.56million units of alcohol annually from the UK market.”

Brewers who sell their beer on draught will also receive tax relief, as announced by Jeremy Hunt in March. He called it 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 all became weaker in the last year due to brewers’ scrambling to deal with rising costs.

Heineken’s Fosters brand dropped from 4pc abv to 3.7pc, saving Heineken approximately 3p per can.

Spitfire’s owner Shepherd Neame reduced the percentage from 4.5pc down to 4.2pc, saving 3p per 500ml.

Old Speckled Hen by Greene King of Suffolk, dropped from 5pc per bottle to 4.8pc. This saved 2p.

The three brewers all blamed rising costs of ingredients and raw materials for their need to reduce costs. Costs have risen for everything from glass in bottles to aluminum cans and malted barley.

Carlsberg’s spokesperson added: “We conducted extensive consumer research and are confident that our new brew will deliver everything beer drinkers expect from our Danish Pilsner, crisp and refreshing with a distinct hop aroma, just crafted to have a little bit less alcohol.”

Carlsberg changed its recipe four years ago, after relaunching their lager as a Danish Pilsner in an attempt to reverse a decline in sales over the past decade.

The shrinking of the pack sizes for many drinks brands is similar to the phenomenon known as’shrinkflation,’ whereby the retail price remains the same or increases while the product’s packaging gets smaller.

Magnum Ice Creams is a recent example. It reduced its four-packs into three-packs without affecting the price at supermarkets.

Carlsberg announced last month that it had sold its Russian business which it promised to do after Vladimir Putin invaded Ukraine in 2014. The company did not reveal the name of the buyer or an estimated time for completion.