Fears over major cider duty hike
18 February, 2010
Treasury due to reveal plans for cider duty in next month's Budget
The price of cider could soar after next month’s Budget as fears mount the government will single out the category for a major tax hike.
All alcohol trade groups are bracing themselves for another wave of duty increases, on top of the two per cent duty escalator.
But cider makers are particularly fearful of the treatment they will receive – despite arguing their case at a meeting with Treasury officials this week.
These fears are based on last December’s Pre-Budget Report (PBR), when the government announced it would review duty on cider after pressure to realign rates with beer tax.
The results of the review are due to be announced at the Budget in a month’s time.
Henry Chevallier Guild, chairman of the National Association of Cider Makers and partner at premium cider producer Aspall, who attended last week’s meeting, said the group had to be realistic.
“The fact it’s been brought up in the PBR indicates we will get something more than anyone else,” he told The Publican.
“But we hope with the case we’ve put in they will limit it to the bare minimum.
“However, if the increase is to pre-2001 levels it would be pretty catastrophic.”
During last year’s recent Health select committee inquiry duty rates on cider were branded an “anomaly” – and it seems the government is determined to address the situation. The concern is more around industrial strength cider, but the whole category could be affected.
Currently duty on a pint of a five per cent beer is 46p, while on an equivalent strength cider it is 18p.
Bernie White, licensee at the Retreat, in Reading, CAMRA’s regional cider pub of the year, said any increase could force up prices. “It could make a significant difference,” he said.
Fifteen MPs signed a parliamentary motion tabled last December calling on cider duties to be brought into line with beer.
Jonathan Mail, head of policy and public affairs at CAMRA, said in its Budget submission the group has called for measures to protect small cider producers if there is a tax increase.
Meanwhile, brewers appear keen for cider to be re-aligned with beer on duty.
The Publican understands the British Beer & Pub Association will meet with the Treasury next week to puts its case forward for the Budget.
Communications director Mark Hastings said: “One thing we are looking for is closer alignment on beer and cider duty.”
The Wine and Spirit Trade Association also said last week it feared the worst on overall alcohol taxes.
Chief executive Jeremy Beadles said: “Enough is enough. We know the public finances are in difficulty but pushing up prices with higher taxes does nothing to help British consumers or businesses battling to recover from the recession.”
Readers' comments
Karl, as to "should get out of the way and stop pretending to be the voice of the industry." might I suggest that you follow your own advice. When you have support of a significant majority, get back to us. Until then please refrain from pontificating and passing comment from your position of failure.
With SIBA lobbying so hard to get cider duties re-aligned (read: increased) with beer duties, this was sadly a foregone conclusion I fear. I am amazed that SIBA do not seem to understand that this will not affect the major "industrial" cider-makers but will hit hard the smaller artisanal and craft cider-makers, who I would have thought SIBA should have some affinity with? Seems like squabbling amongst siblings to me. A sad day for small brewers and cider-makers - who gains? Only the government - certainly not the drinker or small producer.
Once more the BBPA will attend their annual failure meeting. The BBPA, a misrepresentative body, has substantially failed, since its inception, on any issues where it has become involved. This is because its memberships interests conflict with each other let alone the pub sector more broadly. Brigid Simmonds and the BBPA have no qualifications to represent the pub sector and should not do so. They have failed on alcohol duty, smoking, licensing, rating,the mandatory code and more. Their inability to honestly address the issue of the tie has completely hobbled them in any discussion with government. Quite simply Brigid and her colleagues should get out of the way and stop pretending to be the voice of the industry.
More infighting!!!! surely shouldn't the brewers be fighting to get beer duty brought in line with cider duty? That way we all win!!
Over 90pc of cider consumed in this country comes from mass production. The small, craft scale producers will continue to receive tax breaks. The extra duty will hit the likes of Heineken and C&C. What brewer would NOT support this move? For too long have often higher ABV ciders been given an unfair advantage over beer. The cider market has peaked, so the government are not following which way the wind blows.
Good pear of comments Andy.
does this leak constitute in-cider trading?
I am not sure what Brewer intend to gain from supporting this... it does seem a bit like hitting your brother/sister for the sake of it. But then maybe that is the point?! I just hope that craft cider producers are given some protection in the process.
This government are all a bunch of bad apples anyway!
So Brown and Darling have seen which way the wind is blowing and decided to tax it. Anyone supprised? Im not!
Seems the cider producers will have to realign their prices, with the resultant drop in profit, to that of beer rather than carry on down the road of cider being a "premium" product rather than the cheap local drink it was once.
Ken Nason
Will this affect the small scale producers who currently make and sell a certain amount tax free?