Monday 14 March 2016 11:46 am

High duty rates help explain why the UK cider industry is under threat

The cider industry is woven into the fabric of Britains’s heritage and plays a vital role in our rural economy.

There are more than 500 cider makers in the UK, with some 7,000 people employed in the industry. More than that, it is an industry that generates £1bn in apple supply contracts and £100,000,000 in exports. However, the future is not looking quite so certain for cider makers.

Over 50 per cent of the global cider market is in the UK. Great investment has been made in upskilling staff, training new experts and planting more orchards but despite this sales of cider have shrunk by one fifth over the last five years.

Apple 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 in planting new apple orchards. Now these orchards are reaching maturity but the duty escalator has drained customer enthusiasm and the market is plummeting.

So we have a cider industry that has done all the right things. We have developed skills, trained new experts and planted orchards that continue to support the rural economy.

But sadly, the harsh reality is that cider sales are down by more than five per cent in the last year and the 20 per cent decline since 2009 looks set to continue.

We all recognise that if an orchard is grubbed up, then the apples are lost forever, unlike other crops that can be planted each year to meet demand.

However, eventually tough decisions have to be considered and the only way to prevent that from happening is to return the cider market to growth.

As the cider industry looks to the future there are many potential threats on the horizon, the greatest being the direct link between the industry’s fortunes and duty levels.

The fact that duty rates have moved closer to other categories with less complex business models, is the primary reason why cider sales have declined. That is why we are asking the government to work with us to make sure the duty system is fit for purpose.

For us to get cider sales back on track and give the rural economy the confidence it needs, the ratio must return to where it was before. Ultimately, we need the duty level to be cut by 1.2p per pint to help us bring the market back to growth.