Big brewers cut strength of top beers: Industry set for clash with Government over alleged losses caused by change in way excise duty is calculated

BRITAIN'S three biggest brewers are reducing the alcoholic strength of dozens of leading beer brands to compensate for an 'adverse change' in the way excise duty is calculated.

The action has again put the industry on collision course with the Government, which two weeks ago was severely criticised by a select committee for the havoc it has wreaked over the past three years by forcing the big brewers to sell 11,000 pubs.

The Brewers' Society, the industry's trade body, says that if the duty change, imposed on 1 June, had been in place over the past year it would have cost the industry pounds 64m. Duty rates, previously charged on a basis of degrees of original gravity before fermentation, are now imposed when beer leaves the brewery.

Bass, Courage and Carlsberg- Tetley, respectively numbers one to three in the industry, are all reducing alcohol strengths on beer brands such as Hofmeister, Holsten Pils, Webster's Yorkshire Bitter, Tennents Pilsner and Worthington Best Bitter.

Ironically, it was the brewers who requested a change in the duty system, which came into being in 1880, and they have spent the past two years working hand-in-hand with Customs and Excise.

Under the old system, brewers were allowed a wastage allowance of 6 per cent. In practice, efficient brewers have been making tax savings by containing wastage to 2-3 per cent.

Customs is adamant that, as agreed between government ministers and the brewers, the duty change will be fiscally neutral. It says the Brewers' Society has not substantiated its claim.

However, a society spokesman said: 'It is now clear that the initial duty rate is not fiscally neutral. The practical effect is an extra imposition of 3 per cent excise duty on top of the 5 per cent increase in the March Budget.'

He added: 'When this change was discussed with the industry, ministers gave a categorical assurance that it would be fiscally neutral, with the overall amount of duty collected across the industry being the same under the new system.

'The industry now calls on ministers to honour their pledge of fiscal neutrality, as a matter of urgency. This rectification cannot await the November Budget without serious commercial consequences.'

Customs responded that the duty change was imposed only after the society had surveyed its members about volume and strengths of beers produced and sold in 1990. The survey covered 97 per cent of UK-produced beer, and a 'representative sample' of the data was revalidated for 1991.

Customs has offered to examine any data provided by the society to support its claim that the new duty rate should be reduced. It added: 'The data, together with any relevant information, will be taken into account by ministers in the course of designing the next Budget.'

Courage, owned by Fosters of Australia, said the duty changes would cost it pounds 20m and it was reducing the declared alcohol content of 10 beers to avoid passing on the tax increases in the form of higher prices. Hofmeister lager is being reduced from 3.5 to 3.4 per cent, Holsten Pils from 6 to 5.5 per cent, and Webster's Yorkshire Bitter from 3.8 to 3.5 per cent.

Bass is adjusting 19 of its 63 brands, including a reduction from 3.8 to 3.6 per cent in keg and cask Worthington Best Bitter, and from 3.5 to 3.4 per cent in canned Tennents Pilsner.

Carlsberg-Tetley has yet to disclose its changes, although the Carlsberg lagers will not be affected. Whitbread, the fourth-largest brewer, says it is unaffected by the duty changes.

To compensate for any potential loss of flavour and body, the brewers are having to increase the original gravity - the potential to produce alcohol - in most of the affected beers.

Bass, for example, is increasing the original gravity on Worthington Best Bitter from 1036.5 to 1038 and on canned Tennents Pilsner from 1031.5 to 1034.5.

The reductions in alcohol strength have come amid the annual round of price increases. Bass is next month raising the wholesale price of a 36-gallon barrel of beer by an average of 3.58 per cent, or pounds 6.62.

Carlsberg-Tetley, the joint brewing venture set up by Carlsberg of Denmark and Allied-Lyons, has yet to say by how much prices will rise, but the increases are understood to be lower than Bass's.

Whitbread last month increased the price of a pint of cask beer by 2p and of everything else by 4p.

Scotch on the rocks, page 25

(Photograph omitted)

Suggested Topics
Start your day with The Independent, sign up for daily news emails
A boy holds a chick during the Russian National Agricultural Exhibition Golden Autumn 2014 in Moscow on October 9, 2014.
Life and Style
love + sex
Arts and Entertainment
Victoria Wood, Kayvan Novak, Alexa Chung, Chris Moyles
tvReview: No soggy bottoms, but plenty of other baking disasters on The Great Comic Relief Bake Off
Ashley Young celebrates the winner for Manchester United against Newcastle
footballNewcastle 0 Man United 1: Last minute strike seals precious victory
Life and Style
Tikka Masala has been overtaken by Jalfrezi as the nation's most popular curry
food + drink
Arts and Entertainment
Seth Rogan is one of America’s most famous pot smokers
filmAmy Pascal resigned after her personal emails were leaked following a cyber-attack sparked by the actor's film The Interview
Benjamin Netanyahu and his cartoon bomb – the Israeli PM shows his ‘evidence’
ebooksA special investigation by Andy McSmith
Arts and Entertainment
80s trailblazer: comedian Tracey Ullman
Life and Style
A statue of the Flemish geographer Gerard Kremer, Geradus Mercator (1512 - 1594) which was unveiled at the Geographical Congree at Anvers. He was the first person to use the word atlas to describe a book of maps.
techThe 16th century cartographer created the atlas
Arts and Entertainment
Stephen Tompkinson is back as DCI Banks
tvReview: Episode one of the new series played it safe, but at least this drama has a winning formula
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Graduate Application Support Analyst

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Reach Volunteering: External Finance Trustee Needed!

Voluntary post, reasonable expenses reimbursed: Reach Volunteering: Would you ...

Christine McCleave: FP&A Analyst

£36,000 - £40,000: Christine McCleave: Are you looking for a new opportunity a...

Recruitment Genius: Sales Executive - OTE £40,000

£15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...

Day In a Page

War with Isis: Iraq's government fights to win back Tikrit from militants - but then what?

Baghdad fights to win back Tikrit from Isis – but then what?

Patrick Cockburn reports from Kirkuk on a conflict which sectarianism has made intractable
Living with Alzheimer's: What is it really like to be diagnosed with early-onset dementia?

What is it like to live with Alzheimer's?

Depicting early-onset Alzheimer's, the film 'Still Alice' had a profound effect on Joy Watson, who lives with the illness. She tells Kate Hilpern how she's coped with the diagnosis
The Internet of Things: Meet the British salesman who gave real-world items a virtual life

Setting in motion the Internet of Things

British salesman Kevin Ashton gave real-world items a virtual life
Election 2015: Latest polling reveals Tories and Labour on course to win the same number of seats - with the SNP holding the balance of power

Election 2015: A dead heat between Mr Bean and Dick Dastardly!

Lord Ashcroft reveals latest polling – and which character voters associate with each leader
Audiences queue up for 'true stories told live' as cult competition The Moth goes global

Cult competition The Moth goes global

The non-profit 'slam storytelling' competition was founded in 1997 by the novelist George Dawes Green and has seen Malcolm Gladwell, Salman Rushdie and Molly Ringwald all take their turn at the mic
Pakistani women come out fighting: A hard-hitting play focuses on female Muslim boxers

Pakistani women come out fighting

Hard-hitting new play 'No Guts, No Heart, No Glory' focuses on female Muslim boxers
Leonora Carrington transcended her stolid background to become an avant garde star

Surreal deal: Leonora Carrington

The artist transcended her stolid background to become an avant garde star
LGBT History Month: Pupils discuss topics from Sappho to same-sex marriage

Education: LGBT History Month

Pupils have been discussing topics from Sappho to same-sex marriage
11 best gel eyeliners

Go bold this season: 11 best gel eyeliners

Use an ink pot eyeliner to go bold on the eyes with this season's feline flicked winged liner
Cricket World Cup 2015: Tournament runs riot to make the event more hit than miss...

Cricket World Cup runs riot to make the event more hit than miss...

The tournament has reached its halfway mark and scores of 300 and amazing catches abound. One thing never changes, though – everyone loves beating England
Katarina Johnson-Thompson: Heptathlete ready to jump at first major title

Katarina Johnson-Thompson: Ready to jump at first major title

After her 2014 was ruined by injury, 21-year-old Briton is leading pentathlete going into this week’s European Indoors. Now she intends to turn form into gold
Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

Climate change key in Syrian conflict

And it will trigger more war in future
How I outwitted the Gestapo

How I outwitted the Gestapo

My life as a Jew in wartime Berlin
The nation's favourite animal revealed

The nation's favourite animal revealed

Women like cuddly creatures whilst men like creepy-crawlies
Is this the way to get young people to vote?

Getting young people to vote

From #VOTESELFISH to Bite the Ballot