Wednesday, December 7, 2011
British Beer Prices
Look at this list of beers from the Burton Bridge Brewery in Burton-upon-Trent and you'll notice that the price varies by ABV. This is something you almost never see in the US unless it is a huge 10+ percent beer. But why not, after all, higher ABV beers are more expensive to make?
One reason is that customers in the US would be confused, they are not used to thinking about beer this way. But the British are used to it, thanks to a large excise tax that is levied on the final alcohol content of the beer itself. Below you can see the current excise rate. Note that lower strength beer (up to 2.8%) is taxed at half the rate, which is why you'll often see breweries brew a low strength beer in the UK so that they can sell it for much less money (I had a great one at Greene King).
Here is the current excise rate for beer in the UK (the current tax is the last column):
This is big, by the way, there is a VAT tax as well, but the excise tax for a pint of 5% beer is about 50p if my back-of-the-envelope calculation is correct. So for the festival ale at Burton Bridge, about 50p out of the £3 price is for the excise tax alone.
In fact this is such a part of British brewing that apparently the Bass brewery in Burton used to have an entire floor filed with excise agents who tested the beer and levied the tax on each and every barrel that left the brewery.