Dramatic duty rise is a risk to cider if plans not thought through

March 24 2010

The cider industry has concerns over the impact of far-reaching plans announced by Alistair Darling in the Budget Statement.

Henry Chevallier, chair of the National Association of Cider Makers (NACM) said: 'We knew we were being singled out – the Pre Budget Report told us that.

'We are at saturation point on the duty on alcohol – even for a success story like cider. This dramatic increase could well reverse the growth we have generated in recent years.

'Depending on how retailers deal with the duty this will add significantly to what consumers pay for a pint of cider. We have no control over the retail price of cider, but it could mean up to 10p a pint. 

'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.

'What makes this so serious is that cider makers have invested millions to plant thousands of acres of new orchards in the last decade.

'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 the demand for English apples falls. It is the major brands that use the vast majority of the UK fruit the industry buys every year.'

'When Gordon Brown then Alistair Darling left us alone for a few years our investment and innovation doubled the value of the cider market and doubled the contribution we made to government, all that might now be at risk.

'It is not just businesses crying foul because sales decline. It has the potential to undermine what businesses both large and small have done and the great contribution they are making to the rural economy and the communities they are part of.'

 

© NACM 2008