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Cider makers in the UK are lobbying to avoid a tax rise amid speculation that ministers will single out the drink in the upcoming Budget.

UK Chancellor Alistair Darling announced a review of cider tax in the Government's Pre-Budget Report, announced late last year.

With senior drinks industry sources warning this week of "growing pressure at the centre of Government" for stiffer tax rises on alcohol, many in the sector believe cider is in the chancellor's sights.

"The review of cider duty rates, which are roughly half of those of beer, suggests a level playing field may start to emerge," said Mark Hunter, CEO of Molson Coors UK, at an investor conference held yesterday (3 March) in New York for Molson Coors global.

Cider has traditionally been taxed much lower than other alcoholic drinks, and duty was reduced in 2003. But, cider's new-found popularity over the last five years is thought to have caught ministers' eyes.   

Added to this is pressure from health groups to make alcohol more expensive and the Government's need to plug a gaping hole in public finances.

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Henry Chevallier Guild, chairman of the National Association of Cider Makers (NACM) and joint-owner of Aspall Cyder, told just-drinks today: "I don't think by any means that it is a foregone conclusion that we are going to get a big hike."

Chevallier Guild said that proceeds from the 2003 duty cut were ploughed back into production and marketing, helping to bring about a revival of cider's fortunes in the UK.

"They are right to review it and we don't expect to be ignored, compared to other drinks" he said. "But, the cider industry has doubled Government revenues from the category in the last seven years, because the industry has done so well."

Cider production requires significant investment, he added, and a return on this can take "up to 12 years".

The NACM has pressed its arguments with the Treasury.

The Government's "tax escalator" on alcohol already commits it to raising duty tax on all drinks by 2% above inflation in the Budget, which is expected towards the end of March.

However, if the Government loses the General Election, which must take place before June, there may be a fresh Budget later this year.


Sectors: Beer & cider

Companies: Molson Coors

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