Budget 2010: Cider makers say 10% rise in duty is hard to swallow

Producers warn of lost investment in rural economy and threat to England's apple orchards

Steven Morris
guardian.co.uk, Wednesday 24 March 2010 19.58 GMT
West Country "real" cider drinkers tend to be a mellow, inclusive kind of crowd but Alistair Darling would have experienced a decidedly frosty welcome had he ventured out into the pubs of Bristol last night.
"This tax is a kick in the teeth, said Jan Gale, manager at the Clifton Tap, which is renowned for its strong ciders. "The new tax is aimed at binge drinkers but it is the regular, sensible drinkers who are going to be affected most.
"I'd love to get that Alistair Darling across the table from me here," said Sid Davies, a committed "real" cider drinker. "We are going to suffer because the government wants to be seen to be tackling binge drinking. I can afford to pay a few extra pence but it's just not fair."
Across the city at the Bristol Cider House, Danika and Lucy were enjoying a pint of Kingston Black Dry (7.5%: £2.50 a pint) and a hot mulled cider respectively. "I suppose it's okay if the money is going to be used to pay for hospitals and schools," said Lucy. "But can we know it's going to be used properly? We can't."
It would be wrong to suggest there was a sense of panic in the West Country - but cider fans were certainly making plans. Students at Plymouth University were organising a grand Saturday night cider party. Near Glastonbury, Naish's Cider were inundated with people wanting to buy in bulk ahead of the tax hike.
Cider makers today claimed the government was punishing success and warned that the sharp increase in duty on the drink could cause huge damage to the rural economy as well as the industry.
The industry has been booming since Gordon Brown, as chancellor, cut the duty by 2% in 2002. It was frozen for four subsequent budgets. Millions of pounds were ploughed into creating new products around the drink and encouraging it to be seen as fashionable. But today as expected, Darling announced an end to the good times. "There is a long-standing anomaly which has meant cider has been under-taxed in comparison to other alcoholic drinks. I intend to correct this. So duty on cider will increase by 10% above inflation from midnight on Sunday."
Henry Chevallier, chair of the UK's National Association of Cider Makers, said a pint could cost up to 10p more when the duty increases by 10% above inflation. Chevallier said today: "This dramatic increase could well reverse the growth we have generated in recent years. The chancellor has a big budget deficit to address and whilst it might appear obvious to increase the tax on alcohol, the reality is likely to mean reduced demand and therefore less cash in the Treasury coffers.
"Cider makers have invested millions in new orchard. Orchards take years to yield a return and the loss to the rural economy and the environment will be enormous if sales decline sufficiently and demand for English apples falls."
Bulmers, which makes 65% of the 5m hectolitres of cider sold annually in the UK, said it was "hugely disappointed". Harry Turner, cider communications manager for Bulmers, said: "We are victims of our own success. We have planted new orchards, invested in new brands and the chancellor seems to be punishing us."
Much smaller producers were also feeling bruised. Tom Oliver, of Oliver's Cider and Perry, an artisan cidermaker at Ocle Pychard, Herefordshire, was worried by the chancellor's assertion that, from September, changes would be made in the definition of cider to ensure specific strong ciders were taxed "more appropriately".
Artisan cider makers tend to make a stronger drink; Oliver's version can be up to 8%, depending on the weather.
"The larger companies will be able to adjust their recipes to make sure they are not caught by larger taxes. That is anathema to us. We like nature to take its course," said Oliver.
Andrew Quinlan, of Somerset cider producers The Orchard Pig, said it seemed unfair that craft producers might suffer because the government wanted to take a stand against binge drinkers. "We all know there aren't problem drinks, there are problem drinkers."
The tax hike even caused The Wurzels, the band famed for the hit I am a Cider Drinker, to state: "We are all very upset that scrumpy cider, being one of the few pleasures that we cherish down here on the farm … is being hit by such a tax rise. We all realise that we have to tighten the string on our trousers but we feel we are being unfairly penalised."