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Chancellor's cider tax leaves West Country 'smarting'

Dave Harvey Administrator | 14:25 UK time, Wednesday, 24 March 2010

Pub sign being painted

The arguments on the big economic numbers will rage on. But at The Crown in Devizes, they've done the sums already.

"It means about 10p on a pint of beer, and maybe as much as 15p on a pint of cider. Darling's not popular round here, no," says Paul Sullivan, Wadsworth's marketing man.

Paul's remarks are, perhaps, obvious. Brewers rarely love budgets, and Chancellors rarely cut tax on booze. But as I look around this thriving pub, Paul shows me how much more there is to brewing than beer.

"We employ 700 people directly in our own pubs, and then another two thousand indirectly through the pubs we manage."

Mr Sullivan's big worry is the supermarkets. Wadworth, and the other brewers, will have to pass on the tax hike at the bar. But supermarkets may decide not to, and make a big splash with a "Pre-Budget Special".

"Supermarkets are increasingly undercutting our sales," says Mr Sullivan, "driving drinkers into the home. And each pub is someone's business, someone's home, the hub of a village community. If we lose pubs, we lose so much more than just a profit-line."

The Crown is busy today. A group of pensioners out for lunch. A local business team on a training day. And the talk is all of the cider tax. "Cider has been undertaxed," The Chancellor said, so he increased the rate by 10%, worth about 15p a pint.

"It seems so unfair round here," one lady tells me. "There are so many small cider makers, that's what the West Country is all about."

The other measures will be picked over by the economists as the days wear on. But there is something immediate about taxing beer and cider. And deficit or not, the West Country is smarting just a little this afternoon.

Comments

  • Comment number 1.

    The majority of cider is not from small producers but by multinational brewers. Bulmers and Magners are produced by the same company.
    For a long time beer has paid a much higher duty than cider at the same alcoholic strength. Why do you think kids buy 8% cider rather than 4% beer?
    It's cheaper and you get drunk quicker.

  • Comment number 2.

    The idea that “cider duty is at saturation point” is farcical. Have you actually worked out what a 13% rise in cider duty means…. The same as a 5% duty rise in beer – so where’s this move towards alignment!? Today, any cider brand, regardless of ABV (between 1.2% and 7.5% ABV) pays 18p a pint in duty. From Monday, they’ll pay 20p a pint – a rise of 2p. A standard beer (at 4.5%) currently pays 42p, 44p from Monday – again a rise of 2p a pint, more for higher ABV beers. So, come on, let’s get real, cider still pays well under half the tax that beer pays… If anything, they got off way too lightly today.

  • Comment number 3.

    Its the alcohol that causes the problems, not the rest, so why not tax on the ml of alcohol. Also taxation should favour smaller producers of quality products.

    Then rate pubs according to their benefit to the community, the big City pubs that cause problems tax highly, the small country pubs tax less. Allow pubs to have some of the tax back for non-drink related promotions such as live music.

  • Comment number 4.

    I believe Gaspode_ is getting slightly confused with the different Bulmers. Bulmers in the UK is produced in Hereford, along with Strongbow and these brands are now part of the Heineken Group. There is also a Bulmers in Ireland which had to be rebranded as Magners for sale in the UK. Regardless of that his/her point is a sound one.

  • Comment number 5.

    Even though big corporations own the major cider producers, certainly with Bulmers in Hereford there are a huge number of small cider apple producers who are involved in the process, some of which only get called upon if there is a shortage of apples from the main producers. If there is ever a reduction in sales it could be these people who get hit.

  • Comment number 6.

    The higher tax on cider is ill thought through as it is already more expensive than beer and there are people with conditions such as myself (coeliac disease) who are unable to drink beer due to gluten content. Therefore, once again we are being hit by higher prices as a consequence of our ‘disability’ and lack of fairer priced gluten free alternatives!

  • Comment number 7.

    Missed the target.

    I assume the cider tax is aimed at the strong, cheap, white cider beloved of the binge-drinking minority.

    The trouble is the large amount of collateral damage it will cause to the small, quality cider producers.

    Of course New Labour aren't too bothered about this as the West Country is largely irrelevant to them (Mostly Lib-Dem)

  • Comment number 8.

    I was listening to the speech and what I thought I heard the chancellor say was (words to the effect of) certain, selected, higher strength ciders would be subject to the additional tax. Today everybody is talking as if it applies across the board. Did I mishear? or misunderstand? or has he changed the rules since yesterday? Or is everybody getting into a needless panic?

  • Comment number 9.

    @ Chuckwallah

    The budget report hosted on directgov makes no mention of specific kinds of cider, and all will be taxed +10% but does state:

    "From 1 September 2010, the technical definition of cider will be changed to ensure products that more closely resemble made-wines are taxed appropriately."

    Anyone like to hazard a guess as to what that actually means? I'm guessing a "made-wine" is a fortified wine like sherry or port.

  • Comment number 10.

    Why didn't you mention the fact that the excise tax on a pint of cider is less than 20p (which is also much less than the tax on a pint of beer!) -

    Therefore a 10% increase in duty amounts to less than 2p per pint extra to the Treasury?

    It's all very well to report what other people think the figures are, but if these are inaccurate you have essentially spread lies and disinformation to the British public. The tax increase is less than 2p a pint, if cider brewers or pub owners say anything more they are just exaggerating.

  • Comment number 11.

    All this user's posts have been removed.Why?

 

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