The dramatic tax duty increase on cider could spell the end of success stories like Birmingham’s Aston Manor Brewery, according to the National Association of Cider Makers (NACM).
Last year the independent cider maker invested £3 million on a new filing and packing line at its plant on Thimble Mill Lane after a record year of sales.
The family-owned company which makes Frosty Jack’s, Hereford Orchard and Kingstone Press cider also took over Devon Cider Company.
But its significant growth over the past five years is now in jeopardy after Chancellor Alistair Darling announced a ten per cent above-inflation increase on cider tax duty.
The NACM is angry at the Chancellor’s announcements and said the Government should be celebrating success stories rather than damaging them.
Henry Chevallier, chairman of NACM, who was speaking on behalf of Aston Manor Brewery, said: “This dramatic increase could well reverse the growth we have generated in recent years,” he said.
“What makes this so serious is that cider makers have invested millions to plant thousands of acres of new orchards in the last decade.
“When Gordon Brown, then Alistair Darling left us alone for a few years our investment and innovation doubled the value of the cider market and doubled the contribution we made to government, all that might now be at risk.
“Depending on how retailers deal with the duty, this will add significantly to what consumers pay for a pint of cider.
“We have no control over the retail price of cider, but it could mean up to ten pence a pint.”
The brewery, which employs more than 120 people at two sites in Birmingham and Malvern, has benefited from growth in the cider market driven by the popularity of luxury brands, as well as the increasing market share of bottled cider brands like Magners and Bulmers.
Other breweries and pubs will also suffer from a two per cent above-inflation increase on beer, wine and spirit for two further years from 2013.
Campaign groups slammed the government for ‘piling misery’ on struggling pubs.
British Beer and Pub Association chief executive Brigid Simmonds said: “This latest beer tax hike piles on the misery for Britain’s hard-pressed pubs and beer lovers.
“It is also a snub to voters, who by a majority of two to one wanted the Chancellor to scrap the beer tax escalator.
“Since 2008, beer tax has increased by an eye-watering 26 per cent – a £761 million tax rise – and we have seen the loss of 4,000 pubs and over 40,000 jobs up and down the country.”
Patrick Stapleton, general manager of the Hilton Birmingham Metropole, added: “The notable 10 per cent increase of duty on cider and alcopops is unlikely to have a detrimental effect on our client base although the subsequent increase of two per cent each year until 2013 on wine, beer and spirits, however, is.”