Cider Ireland highlights excise anomaly
“Globally the consumption of cider rose by an estimated 50% between 2004 and 2013 – while in Ireland the production of cider has fallen 20.8% over the same period,” says Economist Constantin Gurdgiev and author of the recently-published Craft Cider Sub-Sector: Economic Feasibility Assessment of Active Tax and Regulatory/Compliance Policies Intervention, “Craft cider output in Ireland is out of line with craft beer production and independent whiskey distilling in domestic market terms,” he states.
“Irish craft cider-makers are operating in a market environment that’s not consistent with global trends and opportunities.
“Craft cider production holds significant untapped potential for job creation” he continued, “and export generation in a dynamic, indigenously-anchored sub-sector that strategically aligns with Ireland’s growing offers in the high quality food and drink sector and high value-added tourism and agriculture.”
Cider Ireland is looking to Minister Noonan to level the playing field with Budget 2016 when it comes to excise and cider. Currently, cider in Ireland attracts the second-highest excise tax in Europe and this, along with the fact that the excise rebate offered to micro-brewers does not apply to cider-makers, is unfairly penalising growth of the craft cider industry in this country, believes Cider Ireland.
“Irish craft cider-makers have just over 1% of the Irish cider market and this from cider-makers who, apart from one, started producing in the last five years.” says Con Traas of the Irish Apple Growers Association, “If craft cider were to follow the path of craft beer it could result in nearly 100 extra jobs in apple production and 70 in cider production.
“It takes about 1.5 tonnes of apples to produce 1,000 litres of craft cider whereas in industrial-scale cider-making, due to the watering down process, about a third as many apples are used per 1,000 litres produced.”
Irish craft cider-makers use only Irish grown apples and for a cider-maker “producing real cider, not watering down or using additives” the end product is quite likely to exceed the current excise limit of 6% alcohol by volume, pushing it into a punitive excise bracket when compared to cider that is in the 2.8-6% bracket.
Currently beer produced by microbrewers at 6% ABV attracts a duty rate of €67.65 per hectolitre compared to €94.46 for cider. Microbeer at 7% ABV is €78.93 – cider is €218.44, points out the report.
Microbeer at 8% is €90.20, cider at the same alcohol by volume is again €218.44 and if a craft beer reaches 9% ABV the duty is €101.48 compared to €309.84 for the cider equivalent.
Cider Ireland is also urgently calling for a modification of the wording of Section 26 of the Intoxicating Liquor Act 2000 which currently permits the sale of beer under a wine ‘on’ licence, but not cider.
“Cider is Ireland’s wine” says Emma Tyrrell of Cider Ireland, “True craft cider is a vintage product, made once a year and is a natural Irish alternative to imported wine.
“We feel the wording is just an oversight but the exclusion of the word ‘cider’ is another penalty to a growing indigenous industry. Irish restaurants should be able to sell and promote Irish ciders alongside the imported (and generally higher ABV) wines without having to obtain a separate licence at further cost.”