'Tax hike could reverse growth'

Increase risks capex returns, claims industry

Cider makers respond to 10% increase

Britain’s cider makers have warned the 10% duty increase they face after today’s budget could reverse the growth the sector has enjoyed in recent years.

Cider’s value doubled to £2 billion in the past seven years, fuelled by the meteoric rise of brands such as Heineken UK’s Bulmers and C&C Group’s Magners.

“This dramatic [tax] increase could well reverse the growth we’ve generated in recent years,” said Henry Chevallier, chairman of the National Association of Cider Makers.

“Depending on how retailers deal with the duty, this will add significantly to what consumers pay for a pint of cider. We have no control over the retail price of cider, but it could mean up to 10p a pint [more].”

Chevallier added the increase will be counter-productive, driving down sales and resulting in reduced revenue for the Treasury. He said the tax hike imperilled cider makes that have invested heavily in recent years to up production.

But drinks industry funded alcohol charity Drinkaware gave a cautious welcome to the move to bring cider duties in line with those of beer.

“Amending the under-taxing of cider is a responsible move by the government but increasing the duty on alcohol won't necessarily tackle alcohol misuse and change drinking behaviour,” said Drinkaware’s chief executive Chris Sorek.

Chancellor of the Exchequer Alistair Darling said in today’s announcement that he plans to address the taxation of super-strength white cider, to the derision of Tory leader David Cameron, who claimed the initiative as his own.