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EU puts pressure on UK cider makers
The majority of cider producers in the UK face being forced out of business if the EU goes ahead with the removal of a beneficial tax break, the Campaign for Real Ale has warned.
It is thought the request for the removal of the tax cut has come after pressure from small-scale wine producers (Photo: Wiki)
Currently around 80% of the roughly 500 UK cider makers benefit from a European tax exemption that cuts duty costs for small producers making under 70 hectolitres, or 12,000 pints.
However, the EU is proposing the removal of the tax cut, threatening the existence of the majority of the country’s small-scale cider makers.
It’s estimated the majority of these producers make less than £10,000 in sales per year, and an additional tax bill of up to £2,700 would push many of them out of business.
The Campaign for Real Ale (CAMRA) will today meet the special advisor to the Pierre Moscovici, the European commissioner responsible for taxation across Europe, to discuss the impact of the tax changes. The group was initially due to meet the commissioner himself, although due to the issues surrounding the Greek bailout, he is no longer available.
It is thought that the tax recommendations from the EU have been made following pressure from small wine producers across the continent who don’t benefit from such exemptions.
The meeting, arranged with the support of Labour MEPs Anneliese Dodds and Clare Moody, will be held in Strasbourg along with CAMRA representatives and a small cider producer: Guy Smith from Somerset Cider Company.
Ahead of the meeting, Guy Smith commented, “I run an established vineyard but am now looking at restoring our historic orchard. The legal change would make the restoration unprofitable without the tax breaks, and our business wouldn’t be able to grow.
“The personal and environmental impact will be huge, so I look forward to meeting with the Commissioner in person to explain how this issue has a real impact on people’s livelihoods.”
Andrea Briers, CAMRA national cider and perry committee chairman, said, “The European Union’s demand to impose this new tax on small cider producers will make production uneconomic and lead to wide-spread closures, seriously damaging a small but vibrant industry.”
The meeting follows the presentation of a 26,000 signature petition calling on the UK government to act on this threat which was presented to Downing Street on the 10 June. CAMRA is awaiting a response from the government.
Although this seems like a great story for the anti-EU brigade, the European Commission seems to be just applying rules which were voted on by Members (including, yes, those from the UK). If I understand correctly, and perhaps someone in the know can clarify, Brussels merely obliges member states to apply a rate of excise duty (determined locally by individual, member states) on alcoholic beverages – though the Commission does not allow specific sectors to be exempt. The UK is therefore breaking the rules it voted for in the case of these smaller producers. The crucial point here is that the UK cannot actually “exempt” small cider etc. producers etc, from excise duty, but the government here could, in theory if it wanted to, apply a 0% excise rate on these <70HL producers. The problem lies in Whitehall, not in Brussels.