Cider makers fear a new crunch as political parties chase populist votes
Tom Scotney sees how the war on binge drinking could create an unexpected Midlands victim in the brewing industry.
In tough times people often turn to the bottle. The Treasury is no different – the economy looks better through the bottom of a glass of well-taxed booze.
Alcohol duty has always been one of the choicest targets for revenue-conscious chancellors. Last year’s Budget saw the announcement of an ‘escalator’ that ensured alcohol duty rates will increase by two per cent above the rate of inflation every year for the next four years.
But the latest step being mulled over by parties risks stifling the growth in one of the healthiest markets in the West Midlands – cider production.
Legislation on alcohol has always been used as an outcrop of social policy. As attempts to combat heavy drinking increase by the Government of the day, breweries, distilleries and cider presses are often the first to feel the pain.
And so the ramping up of the rhetoric over binge drinking has sent a shiver down the spine of the cider-makers and apple farmers across the region.
Shadow Home Secretary Chris Grayling said last year that the Conservatives, if they take power, would double the tax on strong cider, defining this as anything more than five per cent.
Not to be beaten, the Government is currently looking at plans to further increase alcohol duty in the upcoming pre-election Budget in another anti-binge drinking move.
All these moves could end up putting a burden on the cider industry – and the Conservative plans for extra tax on strong cider would mean the burden disproportionately falling on small-scale makers of ‘craft’ cider.
When Irish brand Magners relaunched its bottled cider in the early years of the last decade, the hefty marketing push behind it meant bottled cider built up a huge presence both in bars and supermarkets. And the growing presence of bottled ciders made it possible for small producers to get a piece of the market.
Duty on cider started in the 1970s when Denis Healey put in place a tax on the drink during the ‘long hot summer’. Before this, the drink was completely free from tax. Afterwards, all but the most tiny producers found themselves paying the same rate of duty.
While the currently-proposed opposition measures against strong cider are largely based on sales of cheap white cider, this makes up less than one per cent of the alcohol market – and declining.
