Cider makers’ duty plea as UK sales plummet
06:55 17 February 2016
Representatives from leading drinks brands, including Debenham-based Aspall, have called on the Government to cut duty to help save the plummeting UK cider market.
Martin Thatcher, chair of the National Association of Cider Makers (NACM), said the industry had experienced five years of ‘steep’ decline with sales contracting by 20%.
In the last year alone, UK cider suffered a significant 5% fall in sales as a ‘lasting effect’ of increased cider duty rates, it claimed. NACM is calling on the Government to cut duty by 1.2p per pint to help return the industry to growth as Chancellor George Osborne gears up for his 2016 Budget on March 16.
Speaking at a Parliamentary reception held at Westminster earlier this month, Martin Thatcher said: “There are more than 500 cider makers in the UK with some 7,000 people employed in the industry. It is an industry which is woven into the fabric of the UK’s heritage and one that plays a vital role in our rural economy.
“More than that, UK apple cider generates £1billion in supply contracts and £100,000,000 in exports. But its fortunes have always been directly linked to duty levels and this latest period, where duty rates have moved closer to other categories with less complex business models, is almost entirely the reason why cider sales have declined.
“We’re asking the Government to work with us to make sure the duty system is fit for purpose and to help us secure the future of one of the UK’s longest-standing industries.”
Aspall chairman Barry Chevallier Guild, who was at the event at Westminster, said although his firm was bucking the trend, cider makers were having a hard time.
“The total UK cider market has declined in the last year and whilst duty was cut at the last budget it still has a significant impact on cider sales as the data shows. Aspall welcomes any reduction in duty that helps maintain the competitiveness of cider in a very tough UK drinks market,” he said.
“Premium cider, of which Aspall is one, seems to be bucking the trend at the moment and we are experiencing growth in sales of our ciders. The one thing industry needs is stability particularly in a category where planting trees is a 25 year commitment to the future. We therefore support the National Association of Cider Makers call for a duty reduction in this year’s budget.”
More than 50% of world cider is sold in the UK. Investment has been made in upskilling staff, training new experts and planting more orchards but despite this sales volumes for cider have shrunk by one fifth over the last five years, NACM said.
This highlighted the conflict between the cider business model and the extreme impact duty levels can have on customer demand, said Mr Thatcher.
“Our growing cycles are measured in decades not seasons. Seven years ago we were in a period of strong growth, duty was at a sustainable rate and cider makers had the confidence to invest. Now these orchards are reaching maturity but the duty escalator has drained customer enthusiasm. We need the duty level to be cut by 1.2p per pint to help us bring the market back to growth,” he added.