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’.”