Cider makers welcome decision to drop proposed 10 per cent tax increase

The National Association of Cider Makers (NACM) has cautiously welcomed the Government's decision to drop the short-lived 10 per cent increase in cider tax introduced by the former Labour Government earlier this year.

Labour introduced the tax hike during its March budget but was forced to abandon the fast-track its new Finance Act through Parliament before it dissolved in the run-up to May's general election.

The tax hike only lasted until the end of June as chancellor George Osborne confirmed during last week's emergency budget that it would not be reintroduced.

The NACM's Henry Chevallier called on the coalition Government not to change duty rates to give cider producers the confidence to invest in further production.

He said: "We offer a cautious welcome to this budget if it signals the intention to introduce stability and sanity on duty rates.

"After successive increases in duty this news offers some respite, but it only adds to the chaotic approach to duty if next time rates go up again.

"The cider industry has a very long investment cycle - perhaps 40 years. It means we need stability in order to plan and manage our businesses. For the Government to keep moving duty rates means very considerable disruption and a lack of certainty that undermines everything we do.

"Yet we have the recent history to show that stability on duty and policy creates a virtuous circle that means everyone wins. In 2002 there was a very modest reduction in cider duty followed by a four-year freeze. Between 2004 and 2008 the value of the cider industry doubled to £2bn sales a year.

"If this Government promises us a sensible and stable duty regime we will grow our industry and make a greater contribution to help close the budget deficit."


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