Alcohol Tax Policy Pushes Breweries to Reduce Strength
Recent changes in alcohol taxation across the United Kingdom (UK) have resulted in a noticeable shift in how alcohol producers formulate their products, according to media reports.
In August 2023, Movendi International reported about the UK beginning to implement an improved alcohol duty structure that taxes alcohol products based on their Alcohol by Volume (ABV). The alcohol duty change on August 1, 2023 made duty across different types of alcohol more consistent by taxing based on alcoholic strength by volume (ABV). After a decade of cuts and freezes to the alcohol duty in Britain, in August the level of duty began to rise with inflation – an international best practice and World Health Organization recommendation. In recent decades, alcohol had been getting ever cheaper, fueling a public health crisis.
Beer Giants Respond to Alcohol Tax Increase By Lowering Alcohol Strength
Nearly two years later, evidence shows the reform has driven all major breweries to lower the strength of their alcoholic products, in a move to cut tax costs.
For example, as reported by The Sun and American Craft Beer:
- Heineken reduced the ABV of its Sol lager from 4.2% to 3.4%,
- Carlsberg Marston’s Brewing dropped the ABV of its flagship beer from 3.8% to 3.4%, and
- Grolsch Premium Pilsner (owned by beer giant Asahi) went from 4.0% to 3.4%.
This tax-driven adjustment reflects a broader industry trend to avoid rising costs, as the government introduced a lower duty band for alcohol products between 1.3% and 3.4% ABV. In fact, according to American Craft Beer, reducing the alcohol content of a 440ml can of beer from 4.0% to 3.4% saves breweries approximately 23 pence in excise duty.
Alcohol Industry Reactions Reflect Effect from Duty Reforms
Heineken confirmed these adjustments aim to offset increasing production and packaging costs while avoiding further price hikes for customers – this reaction by beer giants matters from a public health alcohol policy perspective because removing alcohol units from the market (for instance by reducing the alcohol strength) promotes population health.
The Sun reports that these shifts follow the February 2025 rise in Heineken’s draught product prices to pubs by an average of 2.97%. Simultaneously, Heineken has warned of significant cost increases due to new packaging regulations requiring full producer responsibility for recycling costs, up from 35% to 100% of associated fees.
The average cost of a pint of beer has reached £5.08, with some regions, such as London, seeing prices over £6. Instead of passing on rising production costs to consumers to avoid making alcohol less affordable (another goal of public health oriented alcohol taxation), beer giants are altering product content to stay competitive while complying with duty reforms.
Major brands such as Stella Artois (owned by Anheuser-Busch InBev), Fosters (owned by Asahi), Old Speckled Hen, and Bishops Finger have all undergone similar ABV reductions, as their competitors Heineken, Carlsberg, and Asahi, listed above.
These changes illustrate that alcohol taxation policy can effectively influence alcohol supply, formulation, and marketing strategies.
Public Health Impacts and Growing Shift to Lower Strength Options
Movendi International reports that lowering alcohol strength can prevent thousands of deaths across Europe.
However, alcohol producers have shown little voluntary commitment to reformulating their products unless pushed by policy.
The current UK case offers clear evidence that duty reform can incentivise lower-strength formulations, aligning with public health promotion goals.
In fact, studies have highlighted that beer and spirits in the UK were previously taxed based on alcohol content, whereas cider and wine were taxed by volume.
This inconsistency enabled the rapid increase of cheap, high-strength products, which undermined public health. The August 2023 reforms addressed this gap by taxing all alcohol based on strength, helping reduce the availability of stronger products at lower prices.
Increased Availability of Low- and No-Alcohol Products
There is also a visible market shift. According to data cited by American Craft Beer, sales of low-alcohol beer in the UK doubled in 2023.
Furthermore, the British Beer and Pub Association found that 87% of pubs in the UK now serve at least one low- or no-alcohol product.
This change signals both industry adaptation and public interest in products with no or lower alcohol content.
Alcohol Taxation Promotes Public Health
The UK’s evolving alcohol tax policy demonstrates how fiscal tools can effectively contribute to population health promotion. These developments are especially important …
As communities continue to emphasise, comprehensive and evidence-based alcohol policy, including effective taxation, remains essential to protecting people’s health. The recent UK experience offers valuable lessons in how smart taxation can create healthier environments, reduce the presence of high-strength alcoholic products, and support people and communities in achieving freedom from alcohol harm.
Sources
The Sun (UK): “Beer strength changes as Heineken makes major update that will affect drinkers“
American Craft Beer: “Beer News: UK Beers Cut Alcohol Content & The Reason People Don’t Drink In Beer Commercials“