AB InBev lowers abv of Stella Artois, Budweiser and Beck's

Stella Artois, Budweiser and Beck’s are being cut from 5% to 4.8% abv as rising input costs bite across the market.

Owner AB InBev, which announced price hikes across its portfolio last year, will shift the beers to the lower abv at the end of this month in a move industry insiders have described as a way of reducing duty costs.

The brewer would not give reasons for the reduction, but confirmed only beer sold in the UK was affected.

“Our decision to bring Stella Artois, Budweiser and Beck’s to the UK market at 4.8% abv during 2012 is in line with evolving UK category trends,” said a spokeswoman.

In October, AB InBev said rising raw material and energy costs would force it to pass on a 7.8% price increase across all its brands from 2 January - a strategy being pursued by other brewers.

Industry insiders said some retailers had rejected demands for price increases and producers were cutting abv to offset costs, retain price points and shore up profitability.

“Some of the major mults have denied price increases for three years, and the brewers’ answer is to shift into smaller bottles and move from 5% to 4.8%,” said one industry source.

It has been estimated that cutting Stella Artois’ abv by 0.2% would save AB InBev about £8.6m a year in duty, based on its off-trade sales alone [Nielsen 1 October 2011].

However, it would need to persuade big customers there was something in it for them too, said Tim Wilson, MD of market analysts Wilson Drinks Report, with money being invested back into the brand.

The move could also come at a cost to the brand equity, warned Mintel senior drinks analyst Jonny Forsyth.

Stella Artois, Beck’s and Budweiser will switch to 4.8% abv in the on-trade in April, although Bud Draught will remain at 4.3%.