Brewers welcome 2.8% abv tax rate

10 December, 2010

Brewers have welcomed a decision to cut duty on beers of less than 2.8% abv next year.The new rates will be included in the Budget in March and come into force in late 2011.

British Beer & Pub Association chief executive Brigid Simmonds said the move would “provide a welcome incentive for investment in these beers, and encourage people to choose lower-strength drinks”.

Though the mid-strength beer category is relatively well developed in Australia, it has yet to catch on in a big way in the UK.

Molson Coors UK introduced its 2% abv Carling C2 beer in 2006, but no other major brewer has committed to a full launch.

The Campaign for Real Ale said it would push the government for a 50% reduction in duty on lower-strength beers, and the removal of the 2.8% abv threshold for member states to play with duty rates, which is enshrined in European law.

It has published research which suggests that 55% of beer drinkers would like more lower-strength options.

Chief executive Mike Benner said: “Current EU rules mean that the UK government can only reduce duty on low-strength beers at or below 2.8% abv.

“These rules are under review and Camra will push for the 2.8% abv cap to be increased, potentially up to 3.5% abv.”?Treasury minister Justine Greening said in a written statement to parliament: “The government recognises that in some areas taxation can have a role in helping to address the harms associated with problem drinking”.

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