Terms

1. Excise duty: a type of tax that is typically imposed on specific goods, such as
alcohol, tobacco, and certain luxury items, at the point of their production or
importation.
2. On-trade and off-trade beer: beer that is sold for consumption on/off the
premises where it is served.
3. “This partly reflects rising UK tax and excise duties, which disproportionately
effect on-trade beer prices, whereas the fall in the off-trade price is largely a
consequence of heavy discounting of beer products by supermarkets, which
utilize beer as a ‘loss leader’ (House of Commons Library, 2013).2”
a) Loss leader: where a product is sold lower than its actual cost to attract
customers into the store and buy other products. The objective of this
marketing strategy is to drive foot traffic and promote overall sales.

Intro
There’s been a major change in the dynamics of beer industry, shifting from on-
trade beer to off-trade beer. One of the reasons for this shift is that tax and excise
duty disproportionally effect on-trade and off-trade beer prices. Also, supermarkets
have been discounting off-trade beer price.