Wednesday, 31 March 2010

Health of UK Cider Industry at Risk

By Sunil Patel

The British cider industry could be set to take a massive hit as result of the dramatic increase in duty announced in the last week’s budget.

The ten percent increase  –  came into effect at midnight on Sunday – could lead to a dramatic fall in cider sales.

Retailers could charge up as much as ten pence extra on the average pint of cider, according to National Association of Cider Makers (NACM).

The cider industry has doubled investment into the rural economy totalling millions of pounds, with thousands of acres of orchards planted over the last decade.

However, if consumer demand falls due to the unprecedented tax hike, it could lead to a devastating loss for apple farmers and cider producers.

Henry Chevallier, chair of the (NACM) said: “Orchards take years to yield a return and the loss to the rural economy and the environment will be enormous if sales decline sufficiently and the demand for English apples falls.

“It is the major brands that use the vast majority of the UK fruit the industry buys every year,” he added.

Last week, the chancellor Alistair Darling justified the introduction of the cider tax to bring it in line with duty on other alcohol.

Over the last few years, the value of cider industry has doubled and so has their contribution made to the government coffers in the form of tax revenue.

However, Mr Chevallier feels the cider industry has been unfairly targeted by the government in the budget and he thinks the decision could backfire on them.

He said: “The Chancellor has a big budget deficit to address and whilst it might appear obvious to increase the tax on alcohol, the reality is likely to mean reduced demand and, therefore, less cash in the Treasury coffers.”

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