The Chancellor has announced in the 2010 budget that duty on cider would increase by 10%. It was said the rise was to address 'a long-standing anomaly which has meant cider has been under-taxed in comparison to other alcoholic drinks.' It was also announced that the definition of cider will be changed in September 'to ensure specific strong ciders are taxed more appropriately'.
However the duty rise has prompted debate with particular dissatisfaction reported amongst the real cider industry. Cider has a lower tax rate largely to account for higher production costs for 'craft' or 'traditional' ciders, but the tax break has been enjoyed by larger brands ranging from Magners to 'super-strength' versions such as White Lightening. The 'supers' have been strongly linked to harmful drinking as they are some of the cheapest available alcohol by volume drinks, seeming to have little to do with apples (see here for past story on 'super' ciders).
Reaction to the duty rise from traditional cider makers, particularly in the West Country has been fierce as the reported cider row continues. Social networking site protest groups and an online petition to Downing street have been set up. David Cameron responded by highlighting the discrepancy between genuine cider and the super strengths. Speaking in Devon Cameron said:
"Taxing all cider so heavily is wrong...We need to address problem drinks with a dangerously high strength, like White Lightning, which have as much relation to an apple as I do with Gandhi."
However 400 smaller cider makers, producing less than 70 hectolitres, will not be affected due to a 'small cider makers exemption'. Others have backed the rise, such as this letter to the Guardian highlighting the duty on a strong still cider will still be less than a regular strength beer (duty rates are cider up to 7.5% abv £31.83 and a 4% beer £65.88 per hectolitre) - others even said it has not gone far enough.
Cider giant Magners have stated they will absorb the rise in duty. Last year White Lightening producers Heineken reportedly planned to de-list White Lightening to 'reinforce its stance on responsible drinking'.
The government also announced the continuend rise of 2% above inflation on duty for other alcoholic drinks as part of 4 year plan.
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