Bury St Edmunds: Greene King launches Tolly English Ale

GREENE King is to become one of the first brewers in the country to take advantage of a new beer duty regime which comes into effect at the start of next month.

The Bury St Edmunds-based company is launching a new lower-strength beer which, at 2.8% alcohol by volume (abv), will qualify for a 50% reduction in the rate of duty payable to the Treasury.

In his Budget in March, Chancellor George Osborne imposed an immediate 7.2% increase in the standard rate of beer duty, based on an “escalator” formula of Retail Price Index (RPI) inflation plus 2%.

But he also announced new upper and lower rates, to take effect from October 1, with the level of duty rising by 25% on stronger beers above 7.5%abv but falling by 50% on low alcohol beers of between 1.2% and 2.8%abv.

Greene King has named its new 2.8% beer Tolly English Ale, so perpetuating the identity of former Ipswich brewer Tolly Cobbold which was acquired by Essex-based Ridleys in 2002 and became part of Greene King when it took over Ridleys in 2005.

John Bexon, Greene King’s head brewer, began developing the new beer 18 months ago – well before the Chancellor’s announcement – in response to consumer demand, with research showing that many people are drinking less for health reasons and even more expressing interest in lower strength drinks.

Tolly English Ale has proved popular in trials and Greene King expects it to appeal to lunchtime and after work drinkers, and also to dedicated real ale fans looking to cut down on their alcohol intake.

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“The extensive trials we ran in our pubs showed us that introducing a quality lower strength beer would open up the category and make cask an attractive option for those looking to enjoy the great taste of a freshly-brewed proper pint without having to worry about it being too strong,” said Mr Bexon.

“That’s why we believe Tolly will be so popular with consumers because it offers them the best of both worlds.”

While the increase in the standard rate of beer duty introduced in March increased the price of a pint by 4p, the 50% reduction on low alcohol beers from October 1 is equivalent to a saving of 18p a pint.

However, with many pubs under extreme financial pressure, due to a combination of higher duty rates, high inflation, the squeeze on consumer incomes and the smoking ban, licensees will be able to choose whether to use the lower duty rate to increase their margins or to pass on the savings to their customers to help drive sales.

Greene King says believes many licensees will opt to pass on a large part of the saving in order to attract new customers, especially in view of recent statistics showing that cost is now the main deterrent to consumers drinking out of their homes and that 44% have cut down on it as a result .