🔮 Better than the Oracle? Our Fair Value found this +42% bagger 5 months before Buffett bought itRead More

Carlsberg weakens beer to avoid upcoming tax hikes

Published 13/07/2023, 14:19
© Reuters.  Carlsberg weakens beer to avoid upcoming tax hikes
CARLa
-

Proactive Investors - Carlsberg (CSE:CARLa) is making its beer weaker, joining several brewers who have also reduced the level of alcohol in their drinks in return for paying less tax on pints.

The Danish brewer confirmed its flagship beer will drop from 3.8% ABV to 3.4% ABV next month.

As of August 1, alcoholic drinks in the UK will be taxed on their alcohol content rather than what type of beverage they are.

Carlsberg claims the change is to allow it to “invest in innovations” and would also be “supporting public health” by reducing the amount of alcohol people drink.

However, it is hard to ignore that when the government reforms come into action the brewer will pay only £9.27 per litre of alcohol rather than the £20.01 fee for beverages between 3.5% and 8.5%.

Rishi Sunak has been pushing for the change as early as 2021, back when he was still chancellor, but the plans have been met with resistance from the industry.

Miles Beale, chief executive of the Wine and Spirit Trade Association said: “We are careering towards an extremely tough period for wine and spirit businesses with tax hikes and other costs.

“Amongst all this pressure the Government has chosen to impose more inflationary misery on consumers on 1 August, with the biggest single alcohol duty increase in almost 50 years.”

Last month, it was revealed beer brands like Spitfire, Old Speckled Hen and Foster’s would all be dropping the drink’s alcohol content.

J D Wetherspoon PLC (LON:JDW) boss Tim Martin called the decision a “big mistake” believing drinkers will soon ditch the brands which drop their alcohol content.

Shares in Carlsberg are up 1.4% on Thursday, trading at around the 1,030 DKr mark.

Read more on Proactive Investors UK

Disclaimer

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.