Saturday, 20 July 2013

Fruity duty

In the past few years, there has been a dramatic increase in the popularity of “fruit ciders”, i.e. those made including some fruit other than apples and pears. As Pete Brown argues here, to some extent they have taken the place of alcopops in the market, offering people a long and refreshing drink that, unlike conventional beers and ciders, is sweet to the taste. However, they have a much classier image than alcopops ever did.

It is noticeable that the vast majority of fruit ciders come in with a modest alcoholic strength of 4.0% ABV, and this is because anything containing fruit that is not apples or pears is taxed as “made-wine”, which suffers duty rates that are considerably higher than conventional cider, and indeed somewhat higher than beer of the same strength. This is explained by Matt of Cheshire cidermakers Nook’s Yard in this blogpost.

While it is sometimes claimed (not least by SIBA) that cider enjoys an unfair duty advantage vis-a-vis beer, it is not the ciders taxed at the lower rate that are enjoying growth.

The respective duty rates (exclusive of VAT) applying to a 500ml bottle for the two categories at various strength points are as follows:

4.0%: Fruit cider 41.1p; Beer 38.2p

5.0%: Fruit cider 56.5p; Beer 47.8p

7.5% Fruit cider 133.4p; Beer 71.7p

At all of these strengths, the duty on a bottle of conventional cider or perry is 19.8p. The massive step up in duty rates above 5.5% ABV means that it isn’t remotely cost-effective to produce fruit ciders in that strength range.

While it probably deserves a blogpost of its own, this also raises the issue of why there is still no requirement to display ingredients on alcoholic drinks, so that consumers are clear about what they’re actually getting.

Incidentally, in the article linked above, Pete Brown also makes some scathing comments about CAMRA’s attitude to cider, referring to their “hopelessly mistaken, unfit-for-purpose definition of ‘real cider’.”

8 comments:

  1. Pete Brown doesn't actually explain why CAMRA's definition of cider is wrong, although he implies that that they should accept ciders that have been "filtered, pasteurised and carbonated". Has he no idea what CAMRA is about?

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  2. What is CAMRA about Nev?

    I looked at some dark fruits strongbow cans in ASDA after your last post to see if there were any indications that it wasn't cider, after my assumption that it was cider albeit cheap crap with the minimum apple juice.

    It claims to be regular strongbow with fruit flavours.

    So is regular strongbow made wine? or just the dark fruits version?

    Also the "contains sulphites" would only be there as a fruit preserver (usedin wines & ciders since Roman times) if there was fruit needing preserving. It wouldn't need to be there for fructose corn syrup.

    But it says something that the lack of ingredients on the bottle make it difficult to work out what is in what and the evidence of what is actually being sold is coming from a HMRC tax graph.

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  3. "So is regular strongbow made wine? or just the dark fruits version?"

    Regular Strongbow is cider (in duty terms); the dark fruit version is made wine. The Dark Fruit (surprisingly) is 4% ABV.

    I'm sure the 35% juice threshold was set so that it wouldn't exclude the big mainstream cider brands.

    When Bulmers cut the strength of canned Strongbow, they saved no duty, unlike similar cuts with beer.

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  4. Cider doesn't condition in the cask, so the real ale definition can't apply.

    There's a rough correlation between "classy beer" and "CAMRA-approved beer", but the classy ciders like Aspall, Thatcher's and Weston's just don't get the seal of approval.

    CAMRA has a huge influence on the ale market, but I would say its influence on the cider market is minimal.

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  5. I've long been of the opinion there should be an entirely separate organisation which campaigns for "Real Cider" - whatever that might be, and not an organistion within CAMRA itself.

    By definition CAMRA is the Campaign for Real ALE, not the organisation that primarily campaigns for the latter, but dabbles in cider and perry owing to pressure from a small, but voiciferous minority of its members.

    I write this even though I'm slowly getting to know and appreciate more and more ciders, after having been extremely wary of the stuff for years. Cider really should have, and deserves, its own campaign, rather than piggy-backing on the back of CAMRA.

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  6. CL: I know you have a very good idea of what CAMRA is about. Its areas of interest are decided by its members at its annual conference, and - like it or not - they decided many years ago that CAMRA also covers real cider and perry which, like beer, is produced in the natural way, without being pasteurised or carbonated. Pete Brown should know all this, and he doesn't explain why he thinks CAMRA's definition of cider is unsuitable.

    I suppose the Campaign hasn't changed its name to the Campaign for Real Ale Cider and Perry because both the name and the resulting acronym, CAMRACAP, would be a bit of a mouthful. Besides, you'd never get all those letters on the tankard logo.

    Paul: I didn't see you proposing a motion to remove cider and perry from CAMRA's remit at the Norwich AGM in April!

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  7. No you didn't see me proposing such a motion, Nev. I don't particularly like public speaking, but given the current structure of CAMRA where motions can only be voted on by those present at an AGM, I think, with a hall full of cider activists, I would be on a hiding to nothing. Personally I doubt whether such a motion would even make it onto the order paper!

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  8. I agree, Paul; I was just being mischievous.

    ReplyDelete

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