The politics of drinking
            July 06, 2011

The 4% solution: drinkers demand less bang for their buck

It didn’t exactly make me jump out of my seat with the excitement of it all, but AB InBev’s announcement that it was relaunching draught Budweiser in the UK at a reduced strength of 4.3% ABV is worth a mention in the context of alcohol policy.

I was at the launch of the original 5% draught Bud, which must have been something like 25 years ago. The Americans had hopes of it becoming a prominent brand among a then burgeoning premium draught lager market. Following which not much happened.

Now the brewing giant sees an opportunity at a lower strength. It has already performed a similar trick with two other brands, launching Beck’s Vier in 2006 and Stella Artois 4% in 2008, after Heineken successfully introduced the 4% premium import Amstel into the UK.

Molson Coors has followed the trend with a 4% version of Grolsch, Grolsch Blond.

The Publican’s Morning Advertiser’s Robyn Black questions whether AB InBev now has too many of these ‘premium standard’ lagers on the go, but it’s clear where the market is heading – people want to drink weaker beers and they are happy to pay more for a premium brand.

It struck me the other day, too, in a pub watching a group of young-ish blokes ordering pints of lager top, a kind of beefed-up shandy. It’s an abomination, no doubt, but also a do-it-yourself way of drinking a reduced ABV beer.

In wine, too, there have been curious developments. Climate change has been steadily pushing up the strength of wines around the world to the extent now that wine-makers are, for marketing reasons, pretending that their products are weaker than they actually are.

Again, it’s because consumers don’t want anything too strong, and it suggests that they are managing their alcohol consumption in a quite sophisticated way, checking the ABVs – I would guess more so than calculating ridiculous ‘units’ - and extending social drinking by keeping the strength down.

It also flies in the face of the idea that all people want is the maximum bang for their buck, and undermines the theory that higher prices will reduce consumption. Of course, if you’re addicted to the alcohol rather than enjoying a drink it’s a different matter – that I would say requires its own solutions.

Despite that, the forces of medical temperance are unrelenting in their campaign to raise prices. Here’s the latest summary of the state of play from the usually balanced Drug & Alcohol Findings.

I like the penultimate paragraph which at least hints at some of the complexities involved and rather contradicts the later assertion that we are simply “wedded to cheap drink”.

Tell that to the Craft Beer Co. I went to the opening of this splendid central London pub last week. A lot of the, admittedly exotic, beers on tap were £3.95 a half. That is, very nearly £8 a pint. Fortunately I wasn’t paying. But I can assure you people will. It’s the way the market’s going.

Even the major brewers are seeing that. For years the supermarkets and major pub groups they sell to have driven down the price they pay for beer such that brewers aren’t making much more than a penny a pint on their high volume products.

Up to a point you can make that pay by selling more pints. But that point has now been reached. Brewers have now begun to look for value above volume. The old imperative to ‘fill the mash tuns’ is no longer overriding.

One answer is to market 4% ABV beer at a premium price. Another is to diversify into higher margin ‘craft’ products, not quite at the stratospheric level of the Craft Beer Co, perhaps, but there’s plenty going on just beneath that.

It would pay those who attack the drinks industry for trying to increase alcohol consumption to take a more nuanced view – than this for example. Like other capitalists, drinks companies want to maximise their profits. And that’s not the same as selling more booze.

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