Booze firm to cut strength of popular beer in weeks and drinkers will be furious
A MAJOR booze firm is set to slash the strength of one of its beers and drinkers will be left fuming.
Heineken is dropping the alcohol level of its SOL brand drinks from 4.2% to 3.4% in a matter of weeks.
The beer giant said the lower strength tipple will start circulating from February 25 but its wholesale price will also fall.
Meanwhile, from February 1, Heineken is also set to hike the price of its draught beer for pubs by an average of 2.97%.
The hike in the wholesale cost could be passed on to punters if pubs, already under pressure, can’t afford to absorb the costs themselves.
Of course, it is up to individual pubs and chains to decide if they will put up prices.
Heineken is also hiking the cost of its wholesale packaged products by an average of 2.5% which could include beers like Desperados.
A Heineken spokesperson previously said it was trying to make cost savings across the business and reduce the impact of inflation on customers.
Why are beer brands decreasing the strength of beers?
Heineken is one of a host of brands slashing the Alcohol By Volume (ABV) of its beers in a bid to cut costs.
It has also reduced the ABV of its top-selling John Smith’s Extra Smooth from 3.6% ABV to 3.4%.
Hophead has recently been reduced from 3.8% to 3.4% while Carlsberg also dropped the ABV of its Grolsch beer from 4% to 3.4%.
The producers of Kronenbourg have also cut the alcohol content of its lager.
Drinks have been taxed by alcoholic strength since August 2023 after a new alcohol duty came into effect.
It means drinks are now taxed according to strength rather than type and on ABV’s of 3.5% or more.
But since its introduction brewers have been slashing the price of their beers to 3.4% so they don’t have to pay the duty, but keeping the prices the same.
The move has become known as “drinkflation”, a play on “shrinkflation”, which sees retailers make products smaller while keeping prices the same.
TROUBLE FOR BREWERS
Brewers are bracing for an upcoming change to the Extended Producer Responsibility (EPR).
EPR sees all of the estimated environmental costs associated with a product throughout its life cycle added to the price.
The first part of this, coming into effect later this year, is the Packaging Recovery Notes (PRN), which is rising from 37% to 100%.
A Packaging Recovery Note (PRN) is a document that proves packaging materials such as glass and aluminium have been recycled or recovered.
The change will see brewers producing packaged goods responsible for 100% of these fees.
Last week, The British Beer and Pub Association called on the UK government to reconsider the crippling costs of the EPR packaging scheme.
The association described the fees as “painful” and said the current estimates risk causing significant financial strain on the industry.
Pubs and brewers are also bracing themselves for an upcoming hike to employer National Insurance contributions (NICs).
The hike will see the amount of NI bosses have to pay on their workers’ salaries go up from 13.8% to 15%.
But some pubs have warned they may be forced to pass the additional costs on to punters in the form of pricier pints.
What was announced in the Budget?
IN the budget the government made several big changes which will impact pubs and restaurants.
It increased the rate of employer Class 1 National Insurance contribution rates from 13.8% to 15.0%.
It also reduced the per-employee threshold at which employers become liable to pay National Insurance from April 6, 2025 from £9,100 to £5,000 a year.
Meanwhile, it increased the National Living Wage from £11.44 to £12.21 an hour from April 2025.
All of these changes will increase the cost for pubs, which they may be forced to pass on to customers.
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