Craft cider producers call for Budget excise reduction

Cider producers have called on the Minister for Finance to include a measure to reduce excise by 50% for craft cider producers in this year’s Budget. 

Ireland’s craft brewers, for example, currently enjoy a special excise reduction and the representative group of Ireland’s cider producers Drinks Ireland|Cider believes that this reduction should be extended to craft cider producers.

The call comes as Seamus O’Hara, Founder and Chief Executive of Carlow Brewing Company (which produces a range of ciders including Falling Apple and Craigies), was re-elected to a second term as Drinks Ireland|Cider Chairman.

“We’re asking for the excise relief programme, currently enjoyed by microbrewers, to simply be extended to craft cider producers,” he stated, “There are at least a dozen craft cider producers scattered across Ireland that would benefit greatly with this reduction.

“Ireland already has the third-highest rate of excise on cider in the EU and this excise reduction for craft cider producers will enable further investment in the sector with the aim of replicating the expansion that the craft beer industry saw over the past 15 years.”

The past 18 months have been challenging for the cider sector overall, with cider sales falling significantly due to Covid Lockdowns.

While the various rolling Lockdowns on hospitality venues in Ireland increased cider purchases in the retail sector this was not enough to offset the loss of cider sales in pubs, restaurants and hotels.

Typically, around 45% of cider purchases take place in the on-trade. However in 2020 just 16% of cider was sold via the on-trade to the off-trade’s 84% of sales, illustrating the massive shift in purchasing patterns.

The Covid impact on cider, which is heavily reliant on the on-trade, meant that cider’s market share of alcohol beverages fell from 7.4% in 2019 to 6.9% in 2020.

Drinks Ireland|Cider is requesting this excise relief for craft cider producers for three reasons:

 

1. The benefits of extending the 50% excise relief to the craft cider sector will result in a marginal loss of just €265,000 in excise revenue to the Exchequer while providing an economic boost to other sectors, estimates Drinks Ireland|Cider based on consumption data from 2020.

 

2. There’s precedence for offering excise relief to small drinks producers. Craft brewers have enjoyed a 50% excise relief for 15 years.  In that time Ireland has seen an increase in the number of indigenous craft breweries from eight to 75 – proof that the excise relief programme is good for small businesses in Ireland.

 

3. Ultimately the excise relief for cider producers will result in downstream benefits to the wider economy, particularly in retail, hospitality and tourism. This will also lead to a greater demand for raw materials from Ireland’s orchards which will have a knock-on environmental benefit too.

 

“The Irish cider industry has had a challenging 18 months and any assistance from the Government would be welcome,” said the Head of Drinks Ireland|Cider Jonathan McDade who pointed out, “Extending this programme to craft cider producers could result in further growth in the sector, foster more innovation and potentially provide consumers with more choice.”