The Campaign for Real Ale (CAMRA), has welcomed the news from Wednesday’s Budget announcement, but says it will continue to work to ensure the exemption is upheld at a European level in the long term.
In February the European Commission requested that the UK remove the duty exemption because it does not comply with an EU directive on excise duty.
80% of Britain’s cider makers are small scale cider producers, says CAMRA, and it has been campaigning against the removal of the duty exemption. Such change would drive producers out of business and have a ‘devastating effect’ on consumer choice, it adds.
Exemption ‘absolutely vital,’ says CAMRA
In the Budget, the government said it would retain the current duty exemption until and unless a replacement scheme is created.
“This is excellent news for real cider drinkers who were concerned that many small producers would have closed if this exemption were removed,” said Tom Stainer, head of communications, CAMRA.
The organisation believes removing the exemption would have put a tax burden of up to £2,700 ($4,155) on small cider producers (many of these sell less than £10,000 / $15,389 in cider each year). This would force many producers to close, thus reducing consumer choice and damaging a historic industry, CAMRA said.
“This exemption has been in place since cider duty was introduced and is absolutely vital to supporting the production and availability of quality real cider,” added Stainer.
The UK exemption applies to cider makers who produce less than 70 hectolitres a year. But the 1992 EU Directive on Excise Duty does not include such an exemption, and consequently the UK scheme “contravenes EU legislation,” according to the European Commission.
CAMRA is an independent, voluntary organisation dating back to 1971, which supports real ale, community pubs and consumer rights. It also supports real cider and real perry.
Last month the organisation presented a petition with 26,000 signatures to 10 Downing Street, calling on the government to maintain the duty exemption. “We are delighted that this is exactly what the Chancellor has [now] announced,” said Stainer.
More to be done
“While we are delighted with the Budget there is more to be done to ensure it is upheld in the new EU Directive. We will be campaigning on the EU level to make sure that it happens,” continued CAMRA.
The organisation met with the Commissioner’s office in Strasbourg this week, along with MEPs who support the campaign.
The Commission plans to launch a consultation on the excise directive, which will be fed into a full review of the Directive. CAMRA will continue to campaign for a duty exemption for small cider producers.
“While the Budget announcement will mean that small cider producers are safe in the short term, we now need to ensure that it is upheld by a legal exemption,” it said.
“Our plan is to focus on the European Commission to ensure that the consultation takes place and forms part of the new Directive on Excise Duties. We will directly input into this consultation document and work closely with MEPs to maintain pressure on the Commissioner's office.”