Cider making ‘under threat’ from duty rise
TRADITIONAL cider makers in the Westcountry have warned they could be facing an almost triple-figure increase in taxes as the Government looks to reform Britain’s alcohol duty system.
The Alcohol Duty Review, launched by the Treasury and HM Revenue & Customs, aims to assess the current system with a view to making it “simpler, more economically rational and less administratively burdensome on businesses and HMRC” for the long term, in light of the UK leaving the European Union.
Announced as part of the Chancellor’s Budget in March, the 58-page call for evidence seeks feedback from respondents on a series of questions, such as whether the method of alcohol taxation should be standardised, duty categories should be changed or unified and if products should be consistently distinguished by their strength.
A long-standing system of taxes, dating back to 1643, alcohol duty is comprised of four individual taxes: beer duty, spirit duty, cider duty and wine duty, each having different structures which determine how much tax has to be paid.
Cider and perry is taxed according to the volume of the product produced. There are different bands applicable depending on the strength of the cider and whether it’s still or sparkling, however unlike beer within that band different strength products will be liable for the same rate of duty.
But producers fear that a move to broadly harmonise and simplify alcohol duties could see the current cider duty increase from 40.38p/litre to £1.08p/litre – a move which they say could have devastating consequences for the Westcountry’s iconic and treasured cider industry.
Barny Butterfield, managing director of Sandford Orchards in Crediton, explained that historically cider has always been treated preferentially, due to its agricultural ties and role as a key cultural and economic driver in low wage and low population areas of the West of England.
“An integral drink and culture is now under threat from people who don’t understand it,” he added. “Cider duty itself was only re-introduced in the seventies, having lasted only 10 years in the 18th century. Government always understood that cider was different. Historically, cider needed to be cared for or lost.”
He added: “It is a time when the Government needs to find money, everyone understands that, but the reality is that cider is not going to make them rich. By adding duty to it, we will simply lose another unique part of British culture,” he said.
“It’s our drink, we should be promoting it and we should be incredibly proud of it. Because of its unique British character and wonderful story to tell, its marketability and exportability is colossal.”
Julian Temperley, founder of the Somerset Cider Brandy Company based near Martock, echoed the same sentiment, describing the proposals as “extraordinarily damaging” for cider making heartlands such as Somerset and Devon. He continued: “It would cause absolute devastation to the landscape and Westcountry culture.”
He added: “If 40p/litre goes up to the new rate that they’re talking about, it will be more than most cider makers would actually charge for their product in the first place.”
Kemi Badenoch, Exchequer Secretary to the Treasury and Minister for Equalities, said: “Reform will need careful reflection. There are many considerations in play.”
The deadline for responses is Sunday, November 29.