This article is from the rec.food.drink.beer FAQ, by John Lock with numerous contributions by others.
Most of the world measures alcohol as a percent of volume (abv). In
the U.S., alcohol in beer is measured by weight (abw). Since alcohol
weighs roughly 20% less than water, abw measures appear 20% less than
abv measures for the same amount of alcohol. In Europe, beer strength
tends to be measured on the basis of the fermentables in the wort.
Until recently, Britain used OG (original gravity), which is 1000
times the ratio of the wort gravity to that of water. Thus a beer
with an OG of 1040 was 4% more dense than water, the density coming
from dissolved sugars. You can generally take one tenth of the last
two digits to estimate the percentage alcohol by volume once the
dissolved sugars are fermented. In the example used, the abv would be
approximately 4% (40/10 = 4%) Currently, British beer is being taxed
on its actual %ABV rather that the older OG so you'll often find both
displayed.
Continental Europe tends to uses degrees Plato. In general, the
degrees Plato are about one quarter the last two digits of the OG
figure. Hence, in our example above, the beer would be 10 degrees
Plato. To get the expected alcohol by volume, divide the degrees
Plato by 2.5.
 
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