UK: Brewers reduce alcohol content to offset rising costs

In a move described as another instance of "shrinkflation" or more specifically "drinkflation," brewers in the United Kingdom are reducing the alcohol content of several popular beers without lowering the prices.

Greene King, a major UK brewer and pub chain, has lowered the alcohol by volume (ABV) of its Old Speckled Hen pale ale from 5% to 4.8%, according to a spokesperson. Similarly, Shepherd Neame, the country's oldest brewer, has reduced the ABV of its Spitfire and Bishops Finger ales from 4.5% to 4.2% and from 5.4% to 5.2% respectively, as reported by a spokesperson.

An investigation by The Mail on Sunday revealed that while the size of bottles and cans remained the same, the brewers decreased the alcohol content, a practice referred to as "drinkflation," similar to "shrinkflation" in the food industry, where product sizes are reduced without a corresponding price decrease. The newspaper claimed that breweries benefit from lower taxes on beverages with lower alcohol content but have not passed the savings onto customers.

A spokesperson for Greene King stated that reducing the ABV helped offset rising costs resulting from inflationary pressures on raw materials, packaging, and energy prices, without significantly affecting the beer's flavor. Shepherd Neame's spokesperson mentioned that lowering the ABV aimed to broaden the appeal of their beers, as consumers increasingly opt for lower-alcohol drinks as part of a healthy lifestyle. They also cited significant cost increases in raw materials, such as energy and glass, as the reason for price hikes on all their beers.

In January, Dutch brewer Heineken also reduced the ABV of Foster's Lager sold in the UK from 4% to 3.7%. They attributed this change to consumer preferences for lower-alcohol products and cited unprecedented cost increases.

Emma McClarkin, CEO of the British Beer and Pub Association, acknowledged that businesses were still grappling with inflationary pressures and were finding ways to absorb higher costs to prevent customers from paying excessively. Despite a recent decline, UK inflation remains stubbornly high compared to other countries in the Group of Seven. Former Bank of England Governor Mark Carney attributed Brexit as a unique factor contributing to high inflation in the UK, which has led to a weaker pound, higher inflation, and weaker growth, affecting ordinary Britons.

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