HL Deb 06 March 1990 vol 516 cc1047-8

2.53 p.m.

Lord Cocks of Hartcliffe asked Her Majesty's Government:

Whether they will encourage the brewing industry to reduce the prices of low alcohol and alcohol-free beers, given that processes which prevent alcohol formation in brewing do not require significant amounts of new capital equipment.

The Minister of State, Ministry of Agriculture, Fisheries and Food (Baroness Trumpington)

My Lords, development of low alcohol and alcohol-free beers has involved the UK brewing industry in significant research, investment and marketing costs. The rapid expansion in the past three years of this market suggests UK consumers are responding positively to industry efforts and government encouragement.

Lord Cocks of Hartcliffe

My Lords, I thank the noble Baroness for that reply. Does she agree that there is a difference between a fair profit and exploitation? The brewing industry has always justified the high price of those beers, which by definition carry no excise duty, by saying that they are expensive to produce. Will the Minister consult the January edition of Brewing Review, where, in describing the process, the brewers shoot their own fox? Does her department think that the time is now opportune to discuss with colleagues how some pressure may be put on the trade in order to bring down exorbitant prices?

Baroness Trumpington

My Lords, with regard to the Brewing Review, I am told that that is not what the article really says. It says that one of the new techniques—partial fermentation—could avoid the need to go through the usual two-stage process of brewing beer and then removing the alcohol using expensive capital equipment. However, that technique needs further work. Using that technique, it is still difficult to guarantee a beer that tastes as beer should and that keeps a reasonable time. In the long run, however, that may be the way that those beers will develop. That should help to reduce prices.

With regard to the duty, brewers generally pay 19p a pint duty on those beers and then have to recover it later, which involves extra paperwork. In the long term, competition should bring down the price of those drinks. That has already happened with lager where vastly increased demand has reduced the original price lead over other beers.

Lord Gisborough

My Lords, when my noble friend considers this point, will she bear in mind the very large number and great cost of alcohol-related crimes among youngsters? Therefore, anything that can be done to encourage them to drink low alcohol beer and thus reduce the amount of resultant crime can only be good.

Baroness Trumpington

My Lords. I entirely agree. The Government have supported the honourable Member for Honiton's Bill, which, if adopted. should be very helpful in that way.

Lord Gallacher

My Lords, the noble Baroness spoke of the effect on prices in the long term. Does she not agree that the long term is likely to be very long indeed in view of the way in which Her Majesty's Government watered down the recommendations of the Monopolies and Mergers Commission report on the supply of beer?

Baroness Trumpington

My Lords, I do not know about watering down. Today I am only here for the beer! There is no evidence that prices have discouraged consumption. This is still a small sector but it is the most rapidly expanding in the UK drinks market. Sales increased by 100 per cent. in 1988 and 60 per cent. in 1989 compared with previous years. That sector now represents about 2 per cent. of total UK sales compared with virtually no sales three years ago.

Lord Taylor of Gryfe

My Lords, is there not an inconsistency in that for good social reasons the price of unleaded petrol is cheaper than that of leaded petrol and yet in the case of beer the price of non-alcoholic beer is dearer than the price of alcoholic beer?

Baroness Trumpington

My Lords, I do not believe that the noble Lord is comparing like with like. However, market forces are the most effective way of determining and restraining prices.

Lord Mason of Barnsley

My Lords, as distinct from Her Majesty's Government encouraging the brewing industry to reduce the price of low alcohol and alcohol-free beers, will they now make representations to the Brewers' Society to do so?

Baroness Trumpington

My Lords, I am not here to defend the brewers. I am merely here to repeat facts.