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.