In an interview with The Morning Advertiser, Hawkes founder Simon Wright bemoaned the classification of any cider produced with adjuncts (fruit, hops, botanicals, etc.) as made-wine, and called for the introduction of a progressive relief system similar to the one in place for breweries.
“There is a huge difference between the way that cider tax is structured and the way that beer tax is structured,” Wright said. “The small breweries' relief was introduced to try and help bring more smaller players into the game, make them competitive and allow them to grow their business organically.
“In cider, the system has stayed the same, and it only basically suits small producers who are farmers who aren't interested in growing and selling to the masses, or in favour of the big guys. But if it was done on volume production, like in small breweries' relief, everyone would have a fair crack of the whip.”
Currently, UK cider makers pay no tax if their annual production is 70hl (7,000 litres) or less. However, beyond this, all producers pay a flat rate of £40.38 per hectolitre produced.
Additionally, any ciders produced with the use of adjuncts such as fruit juice, botanicals or hops are classified as a made-wine. Made-wine is taxed at a rate of £88.93 per hectolitre at an ABV of 4% or less, and £122.30 at an ABV of between 4% and 5.5%.
'Cider renaissance' stifled
Wright said that this system made it impossible for smaller producers to compete for draught lines in pubs, and warned unless the status quo changed, industry growth would be stifled.
“How as a small cider producer, can I compete and educate people about the benefits of our cider if we can't even get it through the door?” he said. “You can't educate the masses about cider unless you can get different products on the bar.
“How many retailers and pubs out there are prepared to pay £120 for a 30-litre keg of cider? Most aren't prepared to pay £80 for a 50-litre keg. This is the difference; you've got beer producers down the road from here who are able to charge £90 for a 30-litre keg, and we can barely charge that for 50 litres. Are we as cider makers doing anything less craft than what they are doing? I would argue we are on parity, but it just isn't treated that way.
“Unless small cider producers like us get some help, things will just stay as they are. This is the reason you are not seeing a cider renaissance in the UK.”
On the impact of made-wine tax, Wright added: “Made-wine tax was brought in during the early ’90s to stop the rise of things like Hooch, but the world has moved on. We now find ourselves constantly saying ‘we can’t experiment or add anything to this cider unless we make it to 4% ABV’, which is completely taking away the structure of our product.”
Industry body slammed
The National Association of Cider Makers is almost 100 years old, and was designed to promote and celebrate cider within the UK. However, the organisation is funded by 10 full members, which include Thatchers, Westons, Heineken and Molson Coors. Wright argued this gave the organisation little motivation to campaign in the interests of smaller cider makers.
“The National Association of Cider Makers is run by the eight largest cider producers in the UK,” he claimed. “It is meant to be our representative body, but what is the benefit for it, as large producers, to bring in a progressive relief system for small cider makers? It has none.”
“How can we be the only urban cidery in the country, when if you go to the US, 50% of its 900 cideries are in urban environments? The US cider association is out there for everyone, whereas the NACM, while being a great ambassador for cider as a whole, is not doing as much for the little guys.”
Wright also stated his belief that there remained a “park bench” mentality towards cider in the UK, but warned that without more urban cider producers, this perception was unlikely to change.
“We made a conscious decision to set ourselves up in this location, close to a lot of the craft beer producers here in Bermondsey,” he said. “The English mentality towards cider is very much a park bench mentality; cheap and cheerful and strong as you like. Unless you have these types of producers in urban environments, how are you going to change the perception of cider?
"We can bring buyers and press here, and show them the process from start to finish, and they then leave here with a completely changed view of what UK cider is about.”