Comment - Cider pays the price
Cider hit by tax rise
Cider makers will be burning effigies of UK Chancellor Alistair Darling tonight after their product was singled out in today's UK Budget.
Cider duty tax is set to rise by 10% above inflation from midnight on Sunday (28 March), Darling announced today (24 March). Inflation stands at 3%, yielding a 13% rise in cider tax in real terms.
First off, let's face it, cider has escaped punitive tax rises handed out to beer, wine and spirits in the last couple of years and duty on cider was actually cut in 2003.
Given cider's new-found popularity - value sales were up 8% year-on-year at the end of 2009 against declines for other drinks categories - the good times were never going to last.
A hole in public finances and pressure for Government action on irresponsible drinking have added to the case for a rise. Darling said today that his move on cider was designed to "correct a long standing anomaly" between it and other drinks.
Some brewers welcomed the decision. Molson Coors UK said: "The Chancellor has taken a positive first step in announcing his intention to remove a longstanding duty anomaly between beer and cider and we are keen to understand the process to achieve this in full."
There was, however, understandable anger from cider country.
Jeremy Brown, the Member of Parliament for Taunton, in the heart of the cider-making West Country, called the tax "gratuitous". He added: "I would be amazed if it made any difference to binge drinking."
The argument against a cider tax rise is similar to the one that can be made for all drinks.
Responsible merchants, pubs and producers are feeling the strain of a Government tax policy that threatens to neither increase Government revenue nor reduce harmful alcohol consumption.
Still, with a General Election expected in early May, there are likely to be more twists and turns on the road ahead in 2010.
Molson Coors has declined to comment on further developments suggesting that it has dropped its interest in Foster's Group....
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