Why Is Alcohol Free Beer So Expensive?

trapper on 28/01/2020 - 13:07
Last edited 28/01/2020 - 13:30

Excise tax on full strength beer is $85.87 per litre of alcohol. (edit; whoops it's actually $50.70, fixed my maths below… )

So for a box of 24 beers at 5%, this is 24 * 0.33 * 0.05 = 0.396L alcohol - which works out to $20 of excise tax.

Now I can for example, purchase a box of 24 Heineken for $45. Subtracting the $20 excise tax leaves only $25 for the actual product.

So how come alcohol free beer, such as Heineken 0.0, that is subject to no excise tax, isn't priced at around the $25 mark? Instead this is priced at $38!?

They have the same or very similar cost of production and sale, yet the alcohol free beer is making way more profit.

Ozbargainers, how can we get alcohol free beer for a reasonable price?

Food & Grocery

Comments

  • Skramit on 28/01/2020 - 13:10
    +25

    Why Is Alcohol Free Beer So Expensive?

    Free market supply & demand.

  • MS Paint on 28/01/2020 - 13:11
    +21

    Low demand.

    • ESEMCE on 28/01/2020 - 13:55
      +3

      ^This
      They'd make millions of Litres of Heineken 5% every year, maybe a few hundred thousand Litres of Alcohol Free, plus an additional step (Reverse Osmosis?) to remove the alcohol.
      I don't think it would be regular Heineken de-alcoholised, I expect it's a special Brew designed to pass as much flavour through the de-aloholisation process as possible.

      Finally, they'll charge what the market is willing to pay.

      FWIW, I quite like the Heineken 0%. Tastes the closest to actual beer of the six or so Very Low or 0% brands that I've tried.
      When I next have a detox, it'll probably be my go to alternative to Sodastream Carbonated Water for events.

      • RC13 on 29/01/2020 - 14:46
        +1

        I'm asking because I'm truly interested - what's the point of alcohol-free beer? Is it because you like the taste of beer itself?

        • Frank Murphy on 29/01/2020 - 16:47
          +5

          Wouldn't that be the only reason?

        • belongsinforums on 29/01/2020 - 18:58

          Looks like you're drinking. Maybe it helps recovering alcos

        • Windows98 on 29/01/2020 - 20:55
          +1

          People who grew up on beer but can't drink it for whatever reason.

          I've got a cousin who's on medication and can't drink, absolutely loves Carlton Zero, another who's got liver issues and also loves it.

        • RefusdClassification on 30/01/2020 - 03:45

          Like decaffeinated coffee, or THC free marijuana, it seems pointless to me. They are all means to deliver a psychoactive agent into the body.

          • sbot on 30/01/2020 - 12:41
            +1

            @RefusdClassification: It can help to break a habit if you go through the motions with the non-habit forming version. Fills the hole where you think 'I could really go for a cold beer right now' or if you've grown to love the ritual of getting a morning coffee.

        • Buddyrock on 01/04/2020 - 23:42

          Some athletes use it the same way as gatorade/Powerade.its a great isotonic that's apparently becoming popular with Olympic endurance athletes.

      • greatlamp on 29/01/2020 - 22:18
        +1

        I'm not sure about Heineken, but Carlton Zero is literally brewed alcoholic beer with the alcohol stripped out after.

        Seems to be the best way to make it taste like real beer is to just make real beer.

        In answer to OPs question, non alcoholic beer cost more to make than real beer (because they have to throw some of it away when they take the alcohol out), and the marketing budget is spread across a much smaller volume of sales.

    • L0zBargain on 28/01/2020 - 14:01
      +5

      Low demand, low prices? That's new :P

    • trapper on 28/01/2020 - 14:15
      +3

      Low demand.

      Not surprising at these rip off prices!

    • smartazz104 on 29/01/2020 - 22:31

      Low demand is causing high prices, or high prices are causing low demand? I would have thought low demand would be a reason to lower the price.

  • original15 on 28/01/2020 - 13:13

    Are you sure on the tax rate for full strength beer? If not, throws the subsequent math and argument out

      • original15 on 28/01/2020 - 13:25

        I’ve looked at that table, but if you google it (“excise tax on beer in Australia”) you’ll find a plethora of websites and articles (incl beer brewers associations) which quote a lower figure than yours. Just sayin

        • trapper on 28/01/2020 - 13:33

          Yeah I somehow missed this bit.

          Alcohol volume exceeding 3.5%, individual container

          less than 8 litres
          8–48 litres (inclusive), and not designed to connect to a pressurised gas delivery system or pump delivery system

          So it's actually $50.70 per litre so $25 per case. I have corrected my post.

          • original15 on 28/01/2020 - 13:35

            @trapper: All G
            If we can just start buying it in containers over 48L we will be sweet right?
            If only Costco would come to the party

          • peterpeterpumpkin on 28/01/2020 - 14:33

            @trapper: Excise duty on beer is payable on the alcohol content above 1.15% by volume in your finished product.

  • [Deactivated] on 28/01/2020 - 13:15
    -3

    Hipster tax.

  • capslock on 28/01/2020 - 13:16
    +14

    You mean some people actually drink beer for the taste?

    • ATTS on 28/01/2020 - 13:32
      +1

      I dont mind taste of beer

      • trapper on 28/01/2020 - 13:46
        +6

        I tried Heineken 0.0 on the weekend and it's pretty good, I'll definitely be taking a few along next time I'm driving.

        Just feels like I'm getting stooged paying a premium for alcohol that doesn't exist.

        • t_c on 29/01/2020 - 15:07
          +1

          Contains 0.05% alc, how many can you smash an hour and be under the .05 limit?

          • cameldownunder on 29/01/2020 - 15:29
            +2

            @t_c: Tried. Doesn't work, you start to spend more time at the toots, than at the party.

          • trapper on 30/01/2020 - 11:32
            +1

            @t_c: It's 0.04%. It is not possible to exceed the limit no mater how fast you drink these.

            Would need to drink 125 Heineken 0.0 to consume the same amount of alcohol as a single full strength Heineken. So we are talking hundreds of beers per hour to exceed the limit. haha

          • trapper on 30/01/2020 - 14:51

            @t_c: Think of it his way - your blood actually has to have a higher alcohol percentage than the beer for you to be over the limit!

            0.04% beer, 0.05% blood alcohol limit.

            edit: Forgot to account for the different units, drink alcohol is measured by volume and blood alcohol by mass.

            So converting we get… 0.05 g/100mL (limit) / 0.789 g/mL (density of ethanol) = 0.063 mL/100mL aka 0.063%

            So your blood actually needs to be more than 50% more alcoholic than the beer! haha

    • Typical16-bitEnjoyer on 28/01/2020 - 16:54
      +1

      Sure do. Craft beer revolution is in full swing here.

      • RC13 on 29/01/2020 - 14:46
        +1

        I don't think craft beer would be very popular if it didn't have alcohol in it, though.

        • Typical16-bitEnjoyer on 29/01/2020 - 17:20
          +1

          Alcohol isn't the draw card. Otherwise they'd just buy shitty goon.

    • Ramrunner on 29/01/2020 - 12:52
      +3

      Yes. I can't drink alcohol due to a medical issue any more and like nothing better than a 0% coldie when I'm with my mates.

      • Filbert on 29/01/2020 - 21:32
        +1

        I’m in the same boat. Alcohol linked to my medical condition.
        Still have a couple coldies on Thurs nights with the lads down the local cricket club. Carlton Zero is my go to.

  • netjock on 28/01/2020 - 13:19
    +3

    It is like vegetarian and vegan food. You're subsiding the others. Just drink soft drink. If you worry about what other people think you'll never retire early because you'll be pissing money down the drain and working along side them until 78 to fit in (you can get the pension at 68 but can you survive).

    • trapper on 28/01/2020 - 13:23
      +2

      I like beer, but sometimes you gotta drive etc

      • netjock on 28/01/2020 - 14:00

        Expensive drive. Drink soft drink and rent a lambo with the savings.

        • Never Pay RRP on 29/01/2020 - 22:03
          +1

          Make it a water for even further savings. Soda water if you are feeling fancy

  • indium on 28/01/2020 - 13:23
    +4

    For beer the excise tax is $50.70 not $85.87

    Also removing the alcohol would add to the costs

    • trapper on 28/01/2020 - 13:25

      Oops I think you're right. That changes the maths a bit, but it's still a rip even then

      I have corrected my original post, thanks.

    • netjock on 28/01/2020 - 14:00

      You sure they remove it? Because it just tastes like coloured soda water with some bitterness added.

      • indium on 28/01/2020 - 16:58

        I've never actually tried any, from what I've just read there seems to be a few ways of removing the alcohol but the processes also remove flavour so the companies add 'natural flavours' to the beer afterwards

      • Ramrunner on 29/01/2020 - 12:54

        If you like pilsners try Holsten.

        Heineken 0 and Carlton 0 I've actually found to be pretty crap. Coopers Ultra Light is not bad as a lager.

        • sauce2k6 on 29/01/2020 - 18:52

          Coopers Ultra Light isn't 0% alcohol though. Still contains a little alcohol as it's less than 0.1 standard drink. Still ridiculously low in alcohol content, but not technically 0%

          • trapper on 29/01/2020 - 19:18

            @sauce2k6: Heineken 0.0 isn't technically 0 either, is 0.04% so 0.0 to 1 decimal point.

            Practically it doesn't matter under 1%, you will never be able to drink it fast enough to exceed your metabolism.

            • desty on 30/01/2020 - 05:21

              @trapper: On this topic, is Carlton Zero actually 0.00% or is it <0.05%, does anyone know? no indications of this on the packaging

    • trapper on 28/01/2020 - 13:36
      +2

      What suffering does alcohol free beer contribute to? Apart from my wallet being emptied.

      • netjock on 28/01/2020 - 14:02
        +3

        Homeless alcohol. If they are removed they need to go somewhere like an orphanage :D

  • [Deactivated] on 28/01/2020 - 13:39
    +2

    Shame on you

  • altitudinous on 28/01/2020 - 14:05
    -1

    To make profit

    Willing buyer, willing seller

    Supply and Demand.

    • trapper on 28/01/2020 - 14:36
      -1

      You could say that about anything.

      The concepts of 'expensive' and 'cheap' do exist you know, hence Ozbargain.

  • Seraphin7 on 28/01/2020 - 14:20
    -7

    Ozbargainers, how can we get alcohol free beer for a reasonable price?

    Drink cat's p1ss.

    • whooah1979 on 28/01/2020 - 14:24
      +4

      Someone that can't taste the difference between urine and beer should stop drinking.

      • Seraphin7 on 28/01/2020 - 14:25
        -3

        Urine and beer yes. Urine and alcohol-free beer … not so much.

  • Payne on 28/01/2020 - 14:25
    +10

    All I saw was Free Beer so I clicked.

  • shanakatak on 28/01/2020 - 14:31
    +5

    Work at a Dan's and here's the basic rundown I give to customers with the same question. It comes down to 2 main things:

    Supply and demand, they don't make much so the production runs are more expensive per unit. Also means less competition on the product in terms of prices between stores.

    Actually making it is more expensive. You have some non alcoholic beers like the Cooper's that are made with no alcohol in the process and this is typically about $28-30 a slab. Ten you've got stuff that is brewed and then the alcohol is removed this is an annoying process and adds cost to the product. Unfortunately the low volumes produced of these beers means that the scales of economy outweigh the reduction in excise.

    • sauce2k6 on 29/01/2020 - 18:56

      Giving customers a rundown but saying coopers do a no alcohol beer? You sure you know what you're talking about? I'd be so annoyed if I asked for a 0% beer and someone gave me Coopers Ultra Light as you suggest lol

      Classic Dan's with their misinformation and false advertising :)

      • shanakatak on 29/01/2020 - 19:15
        +1

        I don't ever reccomend it. IMHO it's pretty shit. I generally call it a malt flavoured soft drink, and describe it as nothing like a beer at all. But people still ignore me and buy it because it's the cheapest in the section.

        Ignoring the fact some of it like the weihenstephaner is infinitely better but it costs more so they won't buy it.

      • Dancasper on 30/01/2020 - 09:46

        sauce2k6, are you having a go that it is not a true "no alcohol" drink (ie alc content ~ 0.05%?) or that it is not a true beer because of the way it is brewed?

        [edit] Shanakatak, you're being way too harsh on the Coopers, it's not that bad! Some of the german beers are very hit and miss.

        • sauce2k6 on 25/03/2020 - 19:27

          Not a go but the first thing you said lol. If I ask for a non alcoholic beer (not that I ever will hopefully lol) I expect a non alcoholic beer. Not a beer that's less than 0.5% alcohol as that still contains a trace of alcohol.

          Would be similar I guess to someone asking for something gluten free and someone giving them a product saying it's gluten free but has less than 0.5% gluten in it. If that analogy works haha

          • Zemm on 09/07/2020 - 15:54

            @sauce2k6: Fruit juice you buy from the supermarket has a trace amount of alcohol in it, it's just natural fermentation. It's a bit different to how gluten works.

  • Archi on 28/01/2020 - 14:40
    +2

    you drink alcohol it impairs your judgement, you therefore buy more. which means they will charge you less because they know you going to buy more.

    you drink alcohol free beer you exercise better judgement and buy one only there fore charge you more to make up for the ones you don't buy.

  • Fysh on 28/01/2020 - 14:45

    People are forgetting the perception of price on the market. When there is $25 beer do you think it looks like a good quality product ? Also they dont want to take too much away from their bigger profit margin products.

  • crentist on 28/01/2020 - 15:22
    +1

    Because it's the best of both worlds. The delicious and popular taste of beer which everybody loves, with none of the terrible loss of inhibition or state of induced relaxation nobody wants but puts up with since we love the taste so much.

  • leiiv on 28/01/2020 - 15:47

    Is there any fizz/soda free beer?

    • ESEMCE on 28/01/2020 - 16:40
      +1

      Crack a beer, place the lid loosely back on it and put it back in the fridge overnight.
      Alternatively, fly to England and get a "hand pull"

    • RC13 on 29/01/2020 - 14:47

      I've had hand pumped, uncarbonated beer in England. It's absolutely disgusting.

    • belongsinforums on 29/01/2020 - 19:26

      I think malty beers are less fizzy. Think Guinness

  • [Deactivated] on 28/01/2020 - 16:17

    Might be an expensive process to remove the alcohol from the beer.

  • TheBilly on 28/01/2020 - 16:55

    I would guess it is generally catered to non drinkers. So they don't drink this often, when they do a few dollars difference in price won't matter.

  • Halo375 on 28/01/2020 - 21:17
    +3

    Accountants price based on cost. Marketing prices based on what people are prepared to pay. Why the hell do you think Apple products are so expensive?

  • thechemist on 28/01/2020 - 21:39

    "How do you price something?" the answer is "whatever you think you can get for it", two examples to think about
    1. Bottled water variance
    2. Face masks (N95/P2) which are still in stock in online stores have gone up by at least 10 fold in the last 10 days

  • TheBird on 28/01/2020 - 22:36
    -2

    Because Karen, Eneloops and Bikers.

  • b0rnwithabeard on 29/01/2020 - 09:19

    just because there's less tax, that doesn't make it any less expensive for production

  • wannagrababargain on 29/01/2020 - 10:05

    Still cheaper than Red Bull, explain that one.

    • resisting the urge on 29/01/2020 - 19:19

      Google collect the difference: The marketing dollars in RB's Youtube and Adwords budgets are getting paid hand over fist every month ;-)

      • greatlamp on 29/01/2020 - 22:24

        They also have to pay for TWO formula one teams

  • field1985 on 29/01/2020 - 11:32

    It's called "economies of scale". Common economic phenomenon:

    The more you produce, the cheaper it becomes per unit.

    Producing smaller specialised batches (of anything eg cars, mobiles, food), increases the costs per unit for obvious reasons (development, re-tooling, skills, marketing, etc).

    https://en.wikipedia.org/wiki/Economies_of_scale

  • solidussnake on 29/01/2020 - 12:08

    Wait until you purchase alcohol from NZ we are getting taken for a ride when it comes to tax

    • belongsinforums on 29/01/2020 - 19:25

      Pretty clear that the government considers it a luxury product

  • jelko on 29/01/2020 - 12:39
    -1

    Alcohol free beer is expensive because nobody wants it.

    • Ramrunner on 29/01/2020 - 12:59
      +2

      If nobody wanted it, manufacturing would not be existent at all.

      Production is, however, ever increasing. On a trip to Europe recently pretty much all countries stock vast quantities and usually have one or two on tap.

      The culture here in Australia is vastly different, granted, but 0% has it's place.

    • RC13 on 29/01/2020 - 14:48
      +4

      Not only do you not understand basic economics, you're also wrong. Demand for alcohol-free liquor is growing pretty strongly across the board (look up Seedlip, Lyre's, etc).

  • Neptunesblood on 29/01/2020 - 15:49
    +1

    I wouldn’t drink beer if I didn’t love the taste.

  • smalltime0 on 29/01/2020 - 17:15

    The process is more complicated. You get a brewed product and then they remove alcohol, it requires a more complex method afaik.

    The one I suspect most brewers use is evaporating the alcohol. This basically involves heating the final product so that the alcohol evaporates. That would make the beer taste like shit (I've drunk some and it does).

    The second is vacuum distillation, which is incredibly expensive, but means the alcohol boils off without the heat being applied.

    I think some use a filter, but that would be so ridiculously expensive that I doubt many do that.

    TLDR: The actual process of removing alcohol from alcoholic drinks is expensive.

    • greatlamp on 29/01/2020 - 22:33

      Most brewers wouldn't use evaporation, that's how you get terrible tasing product. It isn't really suitable unless your intention is to keep the alcohol and throw away the beer.

      This is the modern method:

      scanamcorp.com/beer-dealcoholization/

      • smalltime0 on 30/01/2020 - 07:59

        It doesn't actually state the method, but I presume it is via centrifuge.
        It is the thing I said at the start, it requires an expensive last step which makes it an expensive product.
        Beer is really cheap to make, most of the cost is in excise tax and distribution.
        If you don't believe me, try brewing some.
        It costs about $20 for about 30 litres.

  • [Deactivated] on 29/01/2020 - 17:33

    Non alcoholic beer is more difficult to produce and is also not subsidised by mass industrialised processes that regular beer has due to the volumes consumed.

  • funnysht on 29/01/2020 - 17:40

    Alcohol free alochol?

    Drink water instead

  • Vote for Pedro on 29/01/2020 - 20:40

    It’s priced at what people are willing to pay for it.

  • chumlee on 29/01/2020 - 21:45

    Alcohol free beer doesn't come with free beer goggles either

  • Junnyjun on 30/01/2020 - 09:34

    They actually have some alcohol content in them

  • Dancasper on 30/01/2020 - 10:03

    This is not going to help you OP but I reccommend trying the range of beers produced by "Sobah", a craft brewery in Queensland. Best NA beer I've tried but not cheap..unfortunately.

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