The EU and Cider Duty (1)

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Cider Duty

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ciderlogoIt seems that these days it is impossible to turn on the radio, TV or open a newspaper without seeing something about the UK and its relationship with the EU. So it is appropriate at this point to write something about how the UK levies duty on cider, and the latest proposals coming out of Europe about how we levy duty on our own ciders and perries. But first, an explanation on the current situation seems appropriate.
Unlike beer, which has a sliding scale of duty, cider rates are based solely on strength, regardless of how much is produced. This means that Bulmer’s pay the same duty rate as producers who make relatively small amounts. But there is one exception to this. The very small producers, who make less than 70 hectolitres a year (around 1500 gallons) are exempt from duty.
The EU, which does not seem to like exceptions to any rule, has told the UK Government that they must levy duty on all cider producers, regardless of their size. This could have a devastating effect on the UK cider industry.
There are now more cider producers in the UK than there have been for many, many years. New cider makers are cropping up almost on a weekly basis. Many of these are part-time, making cider as part of their main business, and many are hobby producers who have decided to expand and perhaps sell to their local pubs and beer festivals. The industry is currently buoyant and the range of both ciders and perries gives the consumer a wide choice of drinks, similarly to what we have seen from small breweries in recent years.

But what will happen if they have to start paying duty on top of the exorbitant costs of their production?
Unfortunately, the majority of them will disappear. To make it financially viable, they will have to increase their production by three or four times their current output. For many, this is just not possible. The very small producers do not have either the space or time to be able to do this. This level of production is a hobby or an add on to an existing business – something they can make a bit of money at by selling their product at local festivals or farmers market. They are entirely reliant on how many apples are grown each year, and if they increased production where would all of the extra apples come from? On top of this, the real cider market is only a small percentage of the UK’s total output, so where would they sell their extra product? If they have to start paying duty, possibly up to several hundred would have to stop.
At the moment there is a consultation into how duty is levied on alcohol products by the EU, and both the National Association of Cider Makers and CAMRA have been lobbying to keep the status quo. In fact CAMRA’s on-line petition about this collected over 20,000 names, and CAMRA has also been over to Europe to meet with the EU officials and MEPs to discuss the issue. It would also seem that the UK government is in favour of keeping things as they are, but I would assume that in the current economic climate, it is way down the list of Mr Cameron’s priorities.
So now it is a matter of waiting to see what happens. Remember, most of these small producers are not big businessmen, they are cider enthusiasts, and as such they need to be supported. The alternative could see an enormous amount of producers closing, and we must not let that happen.

Mick Lewis

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