If the question is why are non-alcoholic drinks so expensive if they are not taxed, the answer is simple

Taking a look at the drinks menu of any establishment is a contradiction: non-alcoholic beer It is worth the same as one with alcohol. The same thing happens as with the decaffeinated coffee and the easiest thing is to think that it doesn’t make sense. If you don’t have alcohol, the rules don’t apply. specific taxes on alcohol.

The problem is that there are a lot of factors that come into play.

The contradiction. Than the price of non-alcoholic beer equal The counterpart with alcohol is something that is not reserved for locals: it is also seen on supermarket shelves. The price of these versions not only equals that of alcoholic beverages, but can exceed it in some cases, and is not limited to beer: also non-alcoholic wine or to refined alcohol products.

It’s… strange, especially considering that there are a series of taxes levied on alcoholic products. Guardian echoed this situation, pointing out that the prices of a liter of non-alcoholic beer It is 5% higher than the alcoholic counterpart in supermarkets, 25% higher in pubs. Cider without is 10% more expensive than with and with wine and liquors Something curious was happening: the same price or cheaper in the supermarket, more expensive in the bars.

Taxes. In the United Kingdom, about 10% of the price of beer are taxes, but it is not something exclusive to the islands. In Spain, Italy or France there is also the tax to beer and it depends on whether they have more or less alcohol, also if it is artisanal or not. Wine has VAT in Italy, Germany and Spain, but in France it has a tax between 4 and 10 euros per hectoliter and the highest taxes are observed for distillates.

That is to say, it is evident that part of what is paid for a non-alcoholic drink is taxes and logic tells us that, if a drink does not have alcohol, it should be between a little cheaper -beer- and much cheaper -0% spirits-. The reason why this is not the case is quite simple.

R&D. There are three elements that come into play to prevent it from happening. The first is that, in many cases, production is more complex and expensive than that of alcoholic beverages. In the case of non-alcoholic beer and wine, production starts exactly the same as with alcoholic versions. This implies that the drink is made with fermentationwhich is what raises the graduation. However, then you have to take that extra step that costs money: dealcoholization.

It is something that involves specific technology to remove alcoholic content preserving both flavor and texture. In the elimination process, part of the liquid is lost, so producers must use more raw materials to “fill” and, in addition, the alcohol works as a flavor enhancer and, when eliminating it, it is necessary to incorporate additional ingredients such as extracts, aromas or whatever each brand has in its formula. In short: it is not so much the ingredients as the times and processes, which are not eliminated with alcohol, but rather increased.

Economy of scale. More or less. That is one of the factors. The second is that yes, it seems that we have embarked on the fashion to stop consuming so many alcoholic beverages. It is something that the industry, especially the beer and wine industry, has observed in recent years, when there has been a significant increase in consumers of non-alcoholic products.

If we look back, the non-alcoholic beer market has explodedbut if we look at the total, non-alcoholic beverages only represent a small percentage of volume sales in the alcoholic beverage market. Since there is less demand than the counterpart with alcohol, they do not benefit from economies of scale.

That is: the factories that produce bottles, cans, labels, advertising and the alcohol products themselves produce such a high quantity that the cost per unit is low. When non-alcoholic drinks are produced, different labels are made, but as the quantity produced is smaller, the cost per unit is higher. As for the big brands: the independent ones that only produce non-alcoholic drinks have invested a lot of money in research and machinery and cannot afford aggressive margins because they want to recover that investment.

and psychology. And the third factor is something that seems silly, but also plays an important role in all of this. The Guardian article alluded to the fact that wine or non-alcoholic spirits were priced the same or lower than alcoholic versions in the supermarket, but in bars, things were different. And it is something that has to do with the positioning of the brands and the perception of the user themselves.

Mixing the psychology and marketingif the price of one of the products were significantly lower, it could be perceived as inferior quality. Therefore, in the case of beer, for 0.0 to be seen as a legitimate substitute, the price must be comparable to the alcoholic equivalent. If we see a price equal to or slightly lower than the alcoholic equivalent, the reason may be that it is a version made by an already established brand, with a massive infrastructure that allows them to play with margins and their own brand image.

And it also comes into play that non-alcoholic beers from not so long ago were pretty bad. They have improved a lot in recent years, but John Holmes, director of Sheffield Addictions Research Group (a public health think tank based at the University of Sheffield), point that, to improve the image, “the industry has made the decision that non-alcoholic drinks are versions of premium products, seeking to ensure that ‘non-alcoholic beer’ is not associated with something cheap and of lower quality.” He assures that “if you want to reform the reputation of a product, you launch a premium version.”

And the coffee? In the end, the reason is quite simple: they are more expensive to produce and they do not want us to associate them with lower quality products. But… what happens with the aforementioned case of decaffeinated coffee? Here the caffeine does not mask flavors, but times are also increased and products to use when reducing the caffeine content. And in specialty coffee, which seeks to maintain both the body and all the flavor notes, tremendously complex and expensive techniques are used to get the decaf.

And these processes mean that decaffeinated specialty coffee is, at least, just as expensive because it is specialty… and the caffeine has been removed.

Image | Andy Li

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