Unit 1 & IGCSE: Negative Externalies & beer consumption

In the lead up to the 2012 Budget, this short BBC news video clip looks at the cost of a pint of beer and claims that some brewers have weakened their beer to avoid the higher excise duty on higher-strength drinks. There is a neat explanation of the breakdown of beer costs and students may be surprised to find out the amount of tax they pay if they drink a pint! About 95p from every pint goes to the government.


Higher taxes have been one factor bringing down consumption levels. There has been a 13 per cent decline in alcohol consumption per head in Britain since 2004. The percentage of men aged 16-24 who drank more than 21 units per week has fallen from 32 per cent to 21 per cent from 2005 to 2010

Here is the link And here is the related article from the BBC’s John Moylan

The UK beer industry including the very active British Beer and Pub Association is lobbying the government for a reversal of the planned increases in beer duties. The UK alcohol duty escalator, which increases tax on beer (and other alcoholic drinks) by 2 per cent above the rate of inflation, has been in place since 2008 and will mean a 6-7% rise in average beer prices this year. A bitter blow for drinkers.

Here is some background data from their recent press release campaigning for an end to beer duty rises

Beer duty – key facts

• 950,000 British jobs depend on the UK beer and pub sector

• There are now 900 breweries in the UK – a vital part of Britain’s manufacturing mix

• £13 billion is paid in wages in the sector

• Brewing and pubs are worth £19.4 billion to the UK economy (Gross Value Added)

• The beer and pub sector contributes over £11 billion in tax revenues

The British Beer & Pub Association is the UK’s leading organisation representing the brewing and pub sector. Its members account for 96 per cent of the beer brewed in the UK and around half of Britain’s 52,000 pubs.