Sunday, 26 April 2009

Fewer bangs per buck

I have great respect for our independent cider producers, and from time to time I enjoy drinking their bottled products at home. I’ve also been known to sample the odd drop of traditional cider and perry at the local beer festival. All these quality ciders sell at prices broadly comparable with similar beers, as do keg ciders in the pub. But cider enjoys a favoured alcohol duty regime, with a flat rate of duty, much lower than that for beer, being levied for all strengths up to about 8.4% ABV. I assume this originated from a desire to protect small farmhouse cidermakers, who for most of the 20th century were much more common than micro brewers. But it is noticeable that many of the high-strength, low-quality products on sale in the off-trade are ciders, the likes of Frosty Jack’s. Surely it would make sense – and in the long run improve the image of cider – if cider duty was equalised with that on beer.

6 comments:

  1. No, it would make much more sense for the industry sponsored watchdog, the NACM, to insist that cider was defined as a drink which contained a minimum of (say) 80% freshly pressed juice. Anything less than this is a glucose syrup wine, not a cider, and should levy a higher rate of duty. Bringing the duty payable on cider in line with beer would simply have the result of industrial 'cider' makers reducing the strength of their dubious products, and further reducing their quality, whilst small-scale craft cidermakers would throw in the towel as they wouldn't be able to make anything like a decent return on their high-quality, full-juice, seasonal (and therefore higher risk than brewing) ciders.

    If you really want ot see the death of small-scale cidermaking, by all means push for an increase in duty on cider.

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  2. Sorry, I enjoy drinking cider, but I really fail to see why one category of alcoholic drinks should have a favourable tax regime over another.

    Your argument is just special pleading.

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  3. Sorry to double post, but there could be a duty reduction for small cider producers in the same way as there is for small brewers. I have not seen any evidence of progressive beer duty resulting in small brewers producing cheap crap to undercut Tennent's Super.

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  4. I could be wrong, but I think very small cider producers are completely exempt from duty. I think very small breweries, say ones attached to pubs, could also benefit from enjoying the same. I could be biased of course.

    Broadly I would agree that the type of beverage probably should not benefit from special treatment. Big cider producers should be taxed the same as big breweries. As with small breweries, small cider producers deserve protecting as well. So in part I also agree with Karen and Mark.

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  5. The 1500 gallon duty exempt limit was introduced in the 70's to protect small-scale producers who were making and selling cider at the farmgate as part of a mixed agricultural business.

    Newer small-scale producers like ourselves may not be farmers, but we are also producing as part of our mixed business, ie. a hobby in addition to full-time work. The level of exemption was set deliberately to reflect a level of production where it was impossible to make a living from cidermaking alone. This is just as relevant today. If cidermakers had to pay duty for production up to 1500 gallons (or even 3000 gallons), there would be very little or no profit, and no-one in their right mind would do it.

    Whilst the 1500 gallon limit is directly responsible for the majority of craft cidermaking start-ups, it's also a bar to expansion, and most cidermakers favour a sensible sliding scale of duty similar to that enjoyed by brewers, but still including a (perhaps reduced) duty exemption for entry level. If it's a level playing field you're after, I would also suggest the same for brewers, and particularly wine makers who have an even more difficult time making a profit small-scale.

    As stated before, unless the psuedo-cider glucose wines are taxed at a higher rate, none of this would have any effect on the price of Frosty Jacks etc.

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  6. C. What's wrong with "special pleading" if it has sense behind it? Catch all legislation is often unfair legislation.

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