Four in Five British Cider Makers Under Threat from EU Tax Ruling

Photo: PA
Photo: PA

Four in five British cider makers will be put out of business if the European Commission has its way, thanks to a new ruling that prohibits tax exemption worth £2,500 a year for small holders and artisan brewers.

Under a 1976 British ruling, cider makers who produce fewer than 70 hectolitres a year, which is approximately 12,000 pints, do not have to pay duty. According to the National Association of Cider Makers (NACM), about 80 percent of the 480 cider makers currently brewing cider in the UK fall into that category.

But the EU has decreed that the exemption is unlawful. According to the Daily Mail, the Commission has released a statement in which it said it was “unanimously agreed” that the British exemption contravened EU law.

“EU excise duty rules oblige Member States to levy an excise duty on alcohol and alcoholic beverages,” the statement reads. “There are no provisions which would provide for an exception to the general obligation to levy excise duty in respect of cider and perry made for sale by small domestic producers.”

The ruling would affect self-proclaimed “fruit nerd” and cider producer David Kaspar, who, along with his partner Helen Brent-Smith, runs Day’s Cottage, a small firm which produces apple juice, cider and perry. The couple farm a 16 acre orchard, most of which is dedicated to juice production, but they also brew just under 170 hectolitres of cider which they sell at farmers markets, fairs, shops and pubs.

“The exemption is fundamental to keeping craft cider-making going,” Kaspar told The Observer. “If we had to pay an extra £2,500 it would probably stop us risking making wooden-barrel cider and perry because it’s too fragile. Quite regularly a barrel isn’t very good, so I have to throw it away. I would also be much less inclined to experiment with some of the varieties we’re bringing back from extinction if we had to pay even before we begin.”

“It would be very sad if the tax came in. Not just for financial reasons. It would hasten the demise of traditional orchards and would be another nail in the coffin of traditional cider-making and would be a loss to the natural habitat.”

Kaspar is clearly dedicated to his land, his produce, and his fruit trees, most of which he planted himself. “Most of these barrels, I know which orchard the cider came from and which tree it came from,” he said.

He is not unusual: Natural England has encouraged the planting of traditional orchards by artisan farmers thanks to their stewardship of the natural environment and the work they do in reinvigorating the rural economy.

Some producers have blamed the new ruling on jealousy from continental wine producers who aren’t exempt from the duty. Others point to “big cider”, who produce the majority of the 130 million gallons of cider produced each year.

“The cider industry as a whole trades on this romantic image of the small, local producer,” says Alex Hill, chairman of the South West of England Cider Association, who has been making Bollhayes cider for 26 years from his smallholding in Devon.

“There is a far greater variety of ciders produced by smaller makers than by the industrial giants. With the loss of smaller producers, the range of choice and diversity of cider would be sadly diminished, with the market even more dominated by corporate brands.”

But campaigners are dubious about going up against the might of the EU. “I don’t think we’ve got a hope in hell of taking on the EU when they give a reasoned opinion,” says Gareth MacDonald, Camra’s south-west of England regional director. “We do need to think carefully about helping government to find a way around this.”

Simon Russell, spokesman for NACM, told the Financial Times: “We will make the positive case for the effect of the exemption to be protected whether by retaining the existing legislation or by other means.”

The Treasury has been granted two months to make a “satisfactory response” to the ruling. The Commission has warned that failure to do so will see Britain taken to the Court of Justice of the European Union.

A Treasury spokesman said: “The government’s support for small cider makers has helped create a diverse and vibrant market, improving consumer choice and creating jobs. While we will study the commission’s arguments carefully, our support for this industry will continue.”