Lib Dems to wage war on large cider producers

16 September, 2013

The Liberal Democrats want to see the definition of cider changed so “mass-produced, lower quality” products do not benefit from low duty rates.

Cider benefits from a lower rate of duty than other alcohol to support British farmers and small producers.

The only caveat is that 35% or more of the cider must be made up of apple juice.

But the Lib Dem party, which makes up part of the coalition government, claim this allows large multinational producers to benefit – contrary to the purpose of the tax break.

In its “lines to take” memo – which was accidentally leaked to the press ahead of the Lib Dem conference and caused embarrassment by reminding its MPs that bedroom tax “is not a tax” – the party said: “We want to alter the definition of cider for duty purposes to exclude the mass-produced, lower quality products from the beneficial low duty rates (compared to beer or wine) which apply to cider.

“The current requirement to be classed as a cider is for only 35% of the product to be from apple juice. Increasing this requirement (to, say, 75%) would require manufacturers of high volume, low quality product to either significantly increase the quality of what they're making, or pay duty at (considerably higher) wine rates.

“By contrast, those manufacturers already producing cider from actual apples would be unaffected.

“Either way, the cost of low-end products would increase, the market would be levelled, and the harmful social impact of very cheap, high-strength ciders would be reduced.”

Sam Bowman, research director at think-tank the Adam Smith Institute, accused the Lib Dems of “flogging” a self-serving and “silly” policy.

He told City AM: “It’s pretty obvious that the Lib Dems’ bizarre obsession with apples has to do with the fact that Somerset – the apple capital of the country – is one of the party's only electoral strongholds.

“The proposals are silly: more than doubling the amount of apple juice required for a drink to be defined as a 'cider', taxing any that do not change out of the market.

“That would mean that many popular ciders like Stella Cidre and Strongbow, with apple juice contents of around 50%, would either have to change significantly or become unreasonably expensive. It’s hard to take seriously the Lib Dems’ claims to be independent of special interests while they’re flogging policies like this.”

Meanwhile the National Association of Cidermakers has urged the government to scrap its duty escalator on cider, claiming it could hamper one of Britain’s success stories.

Earlier this year, the coalition government scrapped the escalotor on beer, but kept it in place for cider, spirits and wine.

Under the measure, which has run since in 2008, alcohol duty has been increased each year at a rate of at least 2% above inflation. 

Over at the Labour party conference, former leader Tony Blair’s one-time spin doctor Alastair Campbell will speak about alcohol problems gripping Britain and push for a ban on alcohol advertising and minimum unit pricing.

He will give a similar address to the Conservative conference.

Campbell said: “David Cameron proposed following the Scottish National Party [which is pressing ahead with minimum unit pricing in Scotland] with minimum unit pricing for England. But an industry worth £37.7 billion a year was never going to let that happen without a fight, and the Government backed down.

“At the party conferences I will be supporting Alcohol Concern’s call for a minimum 50p unit price, and raising levels of treatment from the current 6% of dependent drinkers to 15%. Small steps, but they require politicians to back them.”

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