Global giant cuts strength of best-selling ale and ups price
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Heineken UK, Britain’s biggest brewer, is cutting the strength of its major ale brand John Smith’s Extra Smooth, allegedly to encourage moderate drinking, but as a result it will pocket a fortune in reduced excise duty.
John Smith’s Extra Smooth is the country’s biggest-selling keg ale and is currently 3.6 per cent ABV. Heineken plans to reduce that to 3.4 per cent – “lowering the strength to promote moderation”.
Heineken doesn’t reveal how many barrels of John Smith’s it brews annually but SIBA (Society of Independent Brewers) estimates that if production is 100,000 barrels, then the savings in duty could be £53.68 per barrel, which adds up to £4m a year – a sizeable contribution to the global brewer’s income.
A SIBA spokesman said: “We warned the government last year that changes to alcohol duty strength below 3.5 per cent would encourage global brewers to reformulate recipes to save millions of pounds in duty, which they could use to undercut small brewers.”
As well as slashing the strength of John Smith’s, Heineken UK is increasing the price of all its draught beers by 1.73 per cent from today, but it will freeze the price of packaged beers in the off trade.
This is another nail in the coffin for pubs, as drinkers, especially those on low incomes, will choose to buy cheap beer from supermarkets rather than going to pubs.
The Office of National Statistics reports that the average cost of a pint of draught lager increased 10 per cent in the year to December 2023, rising from £4.24 in 2022 to £4.70 in 2023. The same beers can be bought in packaged form in supermarkets for the same price as bottled water.