Cider industry needs cut in duty, MPs told

11 February, 2016

 The government must act to save Britain’s cider makers, MPs were told at a Parliamentary reception last night.

Martin Thatcher, chair of the National Association of Cider Makers, called on chancellor George Osborne to cut the duty on cider by 1.2% in the forthcoming March Budget.

Osborne reduced duty on cider by 2% in his 2015 Budget, but it has failed to stem the industry’s decline in sales.

Sales fell 5% last year, Thatcher said. Over the last five years, the market has contracted by 20%.

The UK has over 500 cider makers and employs some 7,000 people directly, often in rural areas with relatively few opportunities for alternative employment.

Nearly half of global cider sales are made in the UK, and 56% of all apples grown in Britain are used in cider production.

The nature of the industry requires long-term investment in land, planting and training, which is threatened by the current high level of duty.

Thatcher said: “Our growing cycles are measured in decades not seasons.  Seven years ago we were in a period of strong growth, duty was at a sustainable rate and cider makers had the confidence to invest.

“Now these orchards are reaching maturity but the duty escalator has drained customer enthusiasm.  We need the duty level to be cut by 1.2p per pint to help us bring the market back to growth.”

Cider and perry contribute around £370 million annually to the Treasury in duty and VAT.

The cider industry is “woven into the fabric of the UK’s heritage and plays a vital role in our rural economy”, Thatcher added.

“UK apple cider generates £1 billion in supply contracts and £100,000,000 in exports.

“But its fortunes have always been directly linked to duty levels and this latest period, where duty rates have moved closer to other categories with less complex business models, is almost entirely the reason why cider sales have declined.

“We’re asking the government to work with us to make sure the duty system is fit for purpose and to help us secure the future of one of the UK’s longest-standing industries.”

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