UK: Government moves to snuff out cheap cider
Cider must contain 35% apple juice according to new rules
The UK Government is seeking to penalise the bottom end of the cider market by establishing a minimum juice level for products, in a move that has been welcomed by industry leaders.
Any ciders that contain less than 35% juice will be forced to pay more duty tax, under the new rules. The National Association of Cider Makers (NACM) has welcomed the move as a way of raising standards in the industry, but the new regime is also an attempt by ministers to discourage sales of cider at low prices in retailers.
"There are some large manufacturers whose products are going to end up costing them more," Henry Chevallier Guild, chairman of the NACM, told just-drinks today (4 November). He said that he cannot name specific products because company recipes are confidential.
Many white ciders and several private-label ciders, in particular, contain low levels of juice. White ciders have been repeatedly lambasted as a symbol of underage drinking in the UK, although sales of white cider represent less than 1% of the total cider volumes in the country. Cider also only constitutes 8% of UK alcoholic drinks sales.
C&C Group's Gaymer Cider Co looks likely to be one of those that will see some its cider fall foul of the new regulations.
In a report on C&C Group's acquisition of Gaymer, the Office of Fair Trading said earlier this year: "Much of the high strength ‘white cider’ produced by Gaymers had a juice content of only 10%." At such levels, the ciders would be taxed as a "made wine", which commands higher duty.
Chevallier Guild said that the jury was out on whether the new 35% juice benchmark would make some ciders more expensive in the UK. He said that it may take up to 18 months for the results to be clear. "A lot of people are going to have to increase costs of their product, but what people with these products will probably do is wait to see where duty is going to be before they look at pricing," he said.
Even then, retailers will have a significant say on whether cost increases are passed on to consumers.
Chevallier Guild welcomed the new cider rules as a "massive step in the right direction" for industry standards. There was previously no legal minimum on juice content in cider.
Commenting on NACM's partnership with the Government to devise the new definition, he added: “The cider industry as a whole is determined to help ensure that our products are consumed responsibly, and it is only right that we as an industry work with Government to ensure our products are made and marketed responsibly."
The second part of this month's management briefing, looking at the markets of Greece, Ireland, Portugal and Spain, sees RIchard Woodard look at the situation in Ireland....
There are sound reasons behind Anheuser-Busch InBev's foray into the cider market with Stella Cidre, but the brand needs to be clear about what it's trying to do if it's going to survive as a latecome...
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