Cider Industry condemns Budget Decision on Tax

The cider industry has condemned the Budget announcement to proceed with plans to raise taxes on alcohol this year. The news brings further misery to hard-pressed consumers and threatens more job losses in a sector already facing record numbers of business failures, pub closures and worsening trading conditions.   

Said Fenella Tyler, chair of the (NACM). 'The industry had turned round a previous decline through the innovation and investment of cider makers of all scales. This increase coupled with the economic downturn and the reducing number of pubs threatens to reverse this achievement – impacting consumers, growers, suppliers and the many people who work in the industry.  

'The Budget set in train a 2% above inflation tax escalator on alcohol which, combined with last year’s 17% leap in excise duty, will raise duty on alcohol by around 40% by the time of the London Olympics.' 

In its first ever joint budget submission the major drinks industry trade associations warned a total of 75,000 jobs would be at risk if the plans to increase taxes further went ahead. 

The impact of today’s announcement will be more severe than anticipated because the Treasury based its calculations on a notional zero inflation rate rather than the current forecast for inflation of minus 3%.  

The cider industry will continue to seek an end to the four year tax escalator. It is also seeking reversal of the duty increase announced in last year’s Pre-Budget Report, once the temporary VAT reduction it was designed to offset ends in January 2010. 

'At a time when the Government is offering other industries a helping hand it is extraordinary that it wishes to harm the cider industry with further tax increases,' said Fenella. 

'Jobs have already been lost in our industry and the decision to go ahead with a further tax increase puts many more at risk. It’s a bitter irony that this is also bad news for taxpayers because falling alcohol sales jeopardize government revenue.'

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