Small Cidermakers Exemption
CAMPAIGN NEWS AND RESOURCES
We believe that craft cidermaking in the UK is under threat from a forthcoming EU review of the current exemption from excise duty enjoyed by cidermakers who produce less than seventy hectolitres annually.
For more background see Background
ukcider is conducting an urgent campaign to inform the public, press and politicians of our concern
Broad support for the petition
The online petition has been signed by over 1,400 real people and will continue to grow right through into May 2008 when various subcommittees begin to make their recommendations.
Support for the petition has come from various online and local communities who care about the future of cidermaking including:
Campaign Against Threat To Small UK Cider Producers Update:
Peter Hughes (cider enthusiast from Borough Market)has set up a Downing Street e-mail petition,(web link below), I am hoping to get some simple stickers produced (with the e-mail petition link on it) for my customers to sign. Peter tells me that once we have 250 or more signatures it triggers a "ministerial response",so I strongly urge all interested to sign
What else can individuals do
Write to your local press, Email your MP, MEP etc using http://www.writetothem.com/ or letter.
Below is an example letter based on that written by John List who suggests that you may wish to paraphrase and adapt the contents to your own locality and circumstances rather than copy it verbatim. Sending letters directly by Royal Mail, perhaps even hand written may well have more impact, while the website above provides some extra tracking and public accountability.
As an MP who has represented a rural constituency for many years I know you appreciate the contribution made to the rural economy by small scale food and drink producers. I am writing to express my concern over a threat likely to be posed by the Government to one such set of producers.
Ever since alcohol duty was introduced on cider and perry in the 1970s there has been an exemption in place to help small scale producers allowing them to escape duty if they produce less than 70 hectolitres in a year. This exemption was put in place to protect the "farm gate" producers of the day for whom small scale cider and perry production was an integral part of their rural culture. Nowadays it sustains small scale producers in all parts of the UK producing an astonishing range of distinct local styles. The EU Commission are setting up a working group to address special excise duty conditions relating to small scale industries and since this is likely to result in the removal of the 70 hectolitre cider and perry exemption I feel now is the time to express my concern as someone who appreciates quality cider.
I am told by small commercial cider producers that the 70 hectolitre figure is calculated against the viability of small scale cider production as a full time occupation, such that it is too small to be used as a tax loophole. These vocational home businesses thus often operate very close to their profitability threshold and without the 70 hectolitre concession it is likely that many would cease to produce any volume of craft cider above that for personal consumption. The products from the large scale producers do not have the diversity of styles and flavours found in those of the small producers so the loss of this industry would be a loss to us all. Indeed, if the present tax rules must be tinkered with then I believe it would be much simpler for these small scale producers to keep within the limit from year to year whilst coping with the vaguaries of natural cropping and to consider growing their businesses if the present all or nothing 70hl exemption were to be replaced with a sliding scale starting from that point upwards, similar to that which I am told applies to microbreweries.
So please could I ask you to express concern on my behalf where it matters over the threat to this important revenue exemption. I appreciate I am only one of many of your constituents demanding your time and you can not necessarily move mountains but I am sure you would agree were you to sample a bottle that a quality craft cider is worth it!
responses so far
"Our MP for North Dorset, Robert Walter has replied to my petition. He has contacted Neil Parish, MEP for the South West who replied that he had been contacted by other small producers in his area (Well done folks!). I have been sent a copy of our MEP's reply." see RG_2007_June#Petition to MPs
"I have had a reply from Bill Wiggins. He is sympathetic and has passed on my concern to DEFRA and is waiting for their comments."
discussion from ukcider
- The 3CCPA Committee seem to have done a great job in drafting the
- proposal below, thanks for posting it Barry. If ukcider had a
- committee I'd be confident it would endorse the same wording and I'd
- hope that the Welsh Perry and Cider Society would do so too,
- providing a unanimous campaign in defence of craft cider.
- Now what else we can do to influence the NACM adopt the proposal,
- CAMRA to campaign for it or anything else we can do independently to
- lobby DEFRA and the EU? - Andy
- I will do my best to (once again) raise this issue. I wrote an article about
- this 70hl limit for our branch mag which was published last week and is out
- in the pubs now, and also highlighted it as much as I could during the BBC
- Radio Nottingham interview I did last week - the presenters (seemed) to find
- this Tax question & possible EU legislation very interesting. Ray
- I have rung Chris Rundle of The Western Daily Press and suggested he
- reads the thread as it would be of media interest,I wondered if
- someone like Christopher Booker might take it on board as well.
- Chris Rundle has phoned me back,and having read the
- thread,says he will put an article in next tuesday's farming feature
- of the Western Daily Press,I was also thinking of trying to contact
- the UKIP MEP as I am sure it's the type of thing they would get their
- teeth into. Barry
Three Counties Cider and Perry Association - proposal
Three Counties Cider and Perry Association - 30th April 2007
3CCPA Committee Proposal
The committee of the 3CCPA met on Monday 23rd April 2007 to discuss the issue and consider a formal response to the NACM and formulate a consensus lobbying position. As a result of the discussions held it is proposed that - if there is a plan by the EU to remove the current exemption - a sliding duty scale is put into place instead, with the first 70 hI (Ca. 1500 gals) converted into a special band of zero rate cider duty available to all cider makers. Thereafter, as an encouragement to small rural-based businesses to grow and develop, increasing levels of duty would be paid on increasing volumes up to an upper limit of 700hl (Ca. 15,000 gals), after which the full level of duty would be payable,
In principle, this would be similar to the sliding scale of duty available to beer brewers currently operating in the UK and other European Member States and would provide a real encouragement to rural business, farm diversification and artisan and craft cider makers.
Background and Situation to Date. (Note: 'cider' in this paper should be read as including perry)
Since shortly after the re-introduction of duty on cider in 1976, any maker producing 7000 litres (70hl) or less for sale in a 12-month period may apply to HMRC to be classed as exempt from registration as a cider maker. This removes any obligation to pay excise duty. This was done as much to allow the continuation of time-honoured farm cider making practice as to remove an onerous burden of control from the then HMC&E. Production in excess of 70hl brings a duty charge on the whole volume made and sold. At current duty rates (£26,48 per hl for cider 2% ABV - 7.5% ABV) this brings an immediate new annual charge of £1,854.
Unfortunately although the measure does provide a real incentive and great assistance to new businesses to enter into the cider market, it does have a capping effect on small-scale cider production and tends to act as a barrier to such enterprises in fully developing and expanding their businesses and realising their full potential, it can also be argued that the excise exemption continues to underpin the image and reality of cider being a "cheap" and low value drink, which in turn acts as a disincentive to improve product quality.
Current Review of the 70hl Excise Exemption.
The EU Commission (DC Taxud) is now setting up a Working Group specifically to identify and discuss the whole matter of small enterprises and any special conditions relating to excise duty that are extended to them in all EU Member States, This is as part of the ongoing FISCALIS process and the current re-examination of the "Structures" Directive, 92183/EEC. So far, DG Taxud has not sought to have the UK 70 hI provision changed or removed but this MAY happen as a result of the Working Group process now beginning or, indeed, at any time if any Member State makes an official complaint.
In light of this, the NACM is considering whether to propose that, using the powers available in Article 13.3 of Directive 92/83/EEC, the 70hl exemption should be converted into a special band of zero rate cider duty available to all cider makers.
South West of England Cidermakers Association has forwarded a note from National Association of CiderMakers explaining that the EU commission is setting up a working group to look into special conditions relating to excise duty on small enterprises - i.e. the UK 70hl exemption.
NACM note seems broadly to favour getting rid of the exemption.
Comments should go to Nick Bradstock at NACM on 01823 490336 or firstname.lastname@example.org by Friday 20 April.
Open letter to NACM
April 19th, 2007
ukcider is a community of 500+ people appreciative of craft cider and perry. We claim amongst our midst a substantial minority of members who are actively involved in the production of real cider and perry on a small scale, and maintain the definitive online guide to good cider outlets and cider making advice.
I’m writing to you today on behalf of ukcider to endorse the letter which one of our members, Roy Bailey has recently sent in regarding the 7,000 litre exemption as adopted below:
“We understand that the National Association of Cider Makers is in support of the EU’s proposal to get rid of the 70 hectolitres duty exemption on cider and perry.
We believe that this would be a grave mistake of the part of the NACM, and would be disastrous as far as craft cider makers are concerned, leading to many of them ceasing production.
The present exemption is a valuable concession which has enabled a large number of small cider makers to start up in recent years, unbedevilled with the paperwork and expense attendant on paying duty. They have been able to produce interesting and distinctive products, making use of fruit that might otherwise go to waste, and sell their cider and perry at a competitive price. Like the micro-brewers, they have been instrumental in introducing new tastes and flavours which the larger commercial producers fight shy of.
Instead of being confined to the West Country and East Anglia, cider making is now carried on in the majority of the counties of England and Wales, and even in Scotland.
Furthermore, many of these craft producers have sought out and rescued rare and threatened varieties of apples and pears, grafting them and planting new orchards which add diversity to the countryside and to the national stock of fruit.
The brewing industry has only recently been able to enjoy a concession similar to cider’s duty exemption in the form of Progressive Beer Duty. This has enabled new breweries to start up, and existing ones to either invest in new equipment or maintain competitive prices.
Rather than abolish the 70 hl concession, it should be retained and amended so that duty is only paid on the excess over that limit when it occurs, rather than on the whole of the production as at present. The current arrangement penalises those producers who wish to produce between 70 and about 140 hl per annum.
If the NACM goes ahead with its support of this EU proposal (and once again this is a case of the EU sticking its nose into something that is not its business) then it will only provide more ammunition for those who believe that the NACM exists only to further the interests of the big commercial producers, rather than of cider makers in general.
ukcider convenor http://ukcider.co.uk