Systems of taxation

How beer is taxed can have a big impact on what gets made.

A couple of examples.

In the system introduced in the UK in 1880 (and in effect for moe than a century) tax was based on the OG of the wort before fermentation. This gave brewers a huge incentivbe to throw in all sorts of crap, including beer returned from pubs. As this stuff was tax-free. When half of the retail price of a pint was duty, 5% per barrel tax-free could add up to a lot of money.

The US flat-rate tax system has also distorted the market. However strong your beer, you pay the same tax. In ost countries, the tax is in some sort of proportion to the amount of alcohol in a beer. A flat-rate tax is an incentive to brew stronger beer. As the production costs of a 5% and a 9% beer aren't very different. But drinkers won't be happy paying the same price for the weaker beer.

In my chat with Chris Flaskamp, I discovered Chile has another way to tax beer. One not based on alcohol content. It's at 21:47.

 

For those who can't be arsed to look at the video, the Chilean system is simply based on the price. As craft beer is more expensive, its brewers pay more tax than the big boys. Not very faif.