The Big Question: Why has the Government imposed such a heavy tax on cider?
Friday 26 March 2010
Why are we asking this now?
On Wednesday the Chancellor Alistair Darling said duty on cider would go up by 10 per cent above the rate of inflation. It will increase the price of a pint of cider in a pub by about 20p, to about £3 a pint. Cider drinkers say that they are among the biggest losers from the 2010 Budget and are lobbying 10 Downing Street to reverse the policy.
Why has cider been targeted?
Mr Darling says it will bring the tax on cider into line with that levied on beer. His critics say it is because Britain's cider-producing areas are dominated by the Liberal Democrats and the Conservatives and thus not part of what is referred to as Labour's "core vote".
Is cider taxed less than other alcoholic drinks?
Yes, historically it always has been. Until now a pint of cider has been taxed at 18p tax compared with 42p on a pint of beer. Wine and alcopops are taxed at 97p a pint. So even with this week's tax price rise, there is still less tax on cider than on other booze.
Will the tax rise put jobs at risk?
Publicans think so. Last year 4,000 pubs closed up and down the country which threw more than 40,000 people out of work. Brewers say that beer sales were down £650m. They fear that the rises in the price of beer and cider will drive price-conscious customers away from pubs as supermarkets sell ever larger amounts of booze at cut-prices to attract people into their stores.
Now the cider industry, which employs 300 staff at the largest cider maker, Bulmers in Hereford, and perhaps as many again in small artisan cider-making, fears that demand for their product – which had been rising – will drop significantly. Cider makers have invested millions to new orchards in the past decade but – unlike the annually planted cereals used to make beer – these take six years to begin to yield a return. The damage to the rural economy could be significant if sales decline.
The Campaign for Real Ale (Camra) says that any increase in government revenue from the tax rise will be outweighed by job losses, pub closures and reduced business taxes. And on a trip to Somerset yesterday, the Liberal Democrat leader Nick Clegg described it as a "smash and grab tax on an industry which is immensely important to many people here".
How important is cider to the British economy?
The UK is the largest worldwide producer of cider (followed by South Africa then France). We also have the world's highest per capita consumption of cider. We make about 136 million gallons a year and production has more than trebled in the past 30 years. About 45 per cent of all the apples grown in the UK are now used for cider-making and more than two million cider apple trees have been planted since 1995. Cider contributes more than £1m a day in excise duty and VAT to the UK Exchequer.
What is cider?
Traditional cider is made from the juice of cider apples, fermented in their own yeasts, without any filtration, artificial colour or pasteurisation. Camra defines "real" cider as a product containing at least 90 per cent fresh apple juice, with no added flavourings or colourings.
Purists say that real "cyder" is only the juice of the first pressing of the crushed apples. The inferior second pressing is "cider" which was given to farm workers as part of their wages. Mass-produced commercial cider, by contrast, is filtered, coloured, sweetened, pasteurised and force-carbonated. It is a clear golden yellow rather than the cloudy amber-brown of the traditional cider. The most ersatz commercial ciders are the "white" super-strength ciders made from apple concentrate and corn syrup rather than apples. With names like White Lightning their alcohol content can be as high as 7.5 per cent ABV (alcohol by volume). Beer, and much French cider, is usually only half that.
Is cider particularly bad for the health?
Only where people drink the same quantities of the super-strength ciders as they would beer. The industry recognised this six years ago when it stopped selling white cider in 3 litre bottles, acknowledging that one of these giant bottles was not just the cheapest way to buy alcohol in the UK but it tempted people to consume in one go almost the full recommended weekly alcohol intake for an adult male. White cider represents less than one per cent of all alcohol consumed but it is drunk by some of the most vulnerable groups. Young teenagers can be found swigging it in the street and it's a staple of tramps on park benches. It is the quickest and cheapest way to get drunk.
That is why, in addition to this week's tax rise, Mr Darling announced that from September "the technical definition of cider will be changed to ensure products that more closely resemble made-wines are taxed appropriately". Health campaigners want the same done with super-strength lagers.
Who drinks cider?
About 13 per cent of adult Britons drink cider at least once a month, compared to the 49 per cent who drink wine and the 51 per cent who drink beer. But cider sales have soared in the past six years.
Much of the increase in popularity is due to the marketing of the Irish cider-makers, Magners, who have successfully re-branded cider. The drink of kids and down-and-outs has now been repackaged by an advertising campaign which showed it being poured over ice in trendy bars. Industry analysts suspect that cider has been taken up by the generation of twentysomethings who have decided they have outgrown alcopops and want a "natural product".
Why do sales of cider fluctuate so greatly?
In the short term hot weather stimulates demand and cold weather depresses it. But cider has gone in and out of fashion throughout history since the fermentation of apple juice was first recorded in ancient Egyptian, Greek and Roman writings. We know that apple trees for cider existed along the Nile River Delta as long ago as 1300BC. Indeed the word Cider is thought to derive from the Hebrew word "Shekhar" meaning strong drink.
In Britain Julius Caesar found the locals drinking it when he arrived in 55BC, and adopted the habit himself. After the Norman conquest in 1066, the planting or orchards and consumption of cider became widespread. Fine glass from the 18th century show that it was the drink of choice then of the aristocracy.
But it went out of fashion in the 20th century; 55 million gallons had been drunk in 1890 which declined to just 21 million in 1920. In the early 1990s new brands such as K and Red Rock made cider fashionable among the young. But alcopops almost killed it, with 2004 as the modern nadir for cider consumption. Now it is back with a vengeance. Or it was until what is becoming know as the Cider Budget.
What are the lessons of history?
The last politician to introduce a Cider Tax was Lord Bute who, as prime minister in 1763, thought it was a good way to pay for the Seven Years War. His decision to give excise men the right to enter people's homes spawned the phrase "an Englishman's home is his castle". Riots ensued and the prime minister was forced to resign. Mr Darling, you have been warned.
Is the targeting of cider fair?
*Before this week's Budget it was taxed far less than beer – 18p a pint compared with 42p a pint
*Excessive consumption of super-strength ciders was a problem that needed addressing. A £2 per litre tax will help
*Cider fluctuates with fashion, and sales might have fallen anyway
*The tax hike will do nothing to slow the rate of pub closures, with all the implications for local communities
*It will threaten the health of particular rural economies such as in Herefordshire and Somerset
*Cider consumption already contributes more than £1m a day to the Exchequer
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