The government is pressing for changes in European regulations that will make it possible to offer reduced duty levels to beer with strengths of 4% abv or below.
Justine Greening, economic secretary to the Treasury, was asked in the Commons about the effects of reducing duty on beers and ciders with an alcohol level of 2.5% or less.
Responding to Conservative backbencher Robin Walker, Greening said: “The share of the beer and cider market below 2.5% abv is less than 1% of total. As such the impact of reducing the rates on these products would be small, even if the reduction was large.
“Reducing duty on beer and cider up to 4% would have a much larger effect as the market share is much greater. However, under EU directive 92/83, it is not possible to apply a reduced rate to beers above 2.8%.
“The UK hopes to achieve an increase in this threshold through current discussions on potential changes to the directive.”
Greening also quoted HMRC data which shows that every 1% increase in beer duty is equivalent to around £25 million in revenue.