Study Shows Non-Alcoholic Beer Costs Nearly as Much as Regular, Despite Lower Taxes

Non-alcoholic and low-alcohol beers are priced almost as high as their full-strength counterparts, according to new research from the University of Sheffield’s Addictions Research Group. The study shows that despite lower excise duties on no- and low-alcohol (no/lo) drinks, these savings are rarely passed on to consumers. This means people who choose a healthier, lower-alcohol option often pay nearly the same price as they would for regular beer.

Key takeaways

• No/lo beers in the UK are on average only about 5% cheaper than regular beers, despite having 50% lower excise duty.
• Supermarket pricing practices and marketing strategies often keep no/lo beer prices close to premium regular beers.
• Consumers who switch for health reasons may not see the cost savings they would expect from lower alcohol taxes.
• The researchers call for clearer pricing policies and better labeling to help consumers make informed choices.

Pricing gap between no/lo and regular beers

The research team analyzed prices of more than 400 beer products sold in UK supermarkets and online retailers. They found that non-alcoholic and low-alcohol beers were priced, on average, just 5% less than regular-strength beers. This is a small difference given that UK excise duty on no/lo drinks is roughly half the rate applied to standard beers. The study indicates that retailers and manufacturers are absorbing most of the tax savings as profit rather than lowering shelf prices.

In some cases, no/lo beers were priced higher than some regular beers, especially when marketed as premium or craft products. The researchers note that this pricing pattern undermines one of the potential incentives for choosing lower-alcohol options: lower cost.

How marketing and retail practices affect prices

The report points to several factors that keep no/lo beer prices high. First, many no/lo brands position themselves as upscale alternatives, using packaging and branding that mimic premium beers. This strategy allows them to charge a higher price regardless of tax advantages.

Second, supermarket pricing policies often match no/lo products to the price of leading regular beer brands to maintain perceived value. Promotions and discounts on regular beers also widen the gap: regular beers are more likely to be on sale, making the relative price of no/lo beers appear even higher. The researchers found that when regular beers were discounted, no/lo beers were rarely reduced by a similar proportion.

What this means for consumers and public health

Public health campaigns often encourage people to switch to lower-alcohol drinks to reduce overall alcohol consumption and related harms. The study suggests that current pricing practices may work against these goals. If healthier options are not affordable, consumers may stick with regular beers.

The lead researcher, Dr. John Holmes, notes that the findings highlight a missed opportunity. “Alcohol taxes are structured to make lower-strength drinks cheaper, but that benefit is not reaching shoppers,” he said in a statement. He calls for regulatory measures to ensure that tax savings are passed on to consumers, for example through minimum pricing or transparency requirements.

Recommendations for fairer pricing

The research team suggests several policy changes. One option is to require retailers to display the excise duty saving clearly on price tags, so consumers can see how much of the cost is tax-related. Another is to adjust duty rates further or introduce price caps on no/lo products.

Manufacturers could also voluntarily commit to pricing no/lo products closer to their tax-adjusted cost. The study notes that some brands have already started doing this, but widespread adoption has not occurred. Without intervention, consumers will continue to pay a premium for a healthier choice.

Frequently Asked Questions

Is non-alcoholic beer really healthier?

Non-alcoholic beer typically contains fewer calories and no alcohol, which can reduce risks associated with drinking, such as liver disease and accidents. However, it is not calorie-free and may still contain small amounts of alcohol (up to 0.5% ABV). For people who want to avoid alcohol entirely, it can be a useful alternative.

Why are no/lo beers not cheaper despite lower taxes?

The main reason is that retailers and brewers keep prices high to maximize profit and position no/lo products as premium items. Excise duty makes up only a small part of the final price, so even halving it does not lead to a large reduction unless the savings are passed on. Marketing and shelf placement also play a role.

Are there any tax breaks passed to consumers?

In some cases, but rarely. The study found that only a few products showed a clear price reduction that could be linked to the lower duty. Most no/lo beers cost about the same as their regular counterparts. Consumers should compare prices per unit and look for special offers, but overall the tax break does not translate into lower shelf prices.

This is an original report by Vital Signs Today, informed by reporting from Medical Xpress. Read the original source.

This article is for information only and is not medical advice. See our Medical Disclaimer.