Calls for excise relief for craft cider producers
Cider producers have called on the Government to extend the excise relief, currently enjoyed by craft brewers, to craft cider producers. The excise relief 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 call comes from by Drinks Ireland|Cider, the representative voice for the cider industry in Ireland as it launches its annual Cider Market Report. The report shows that there was an 11.3% fall in total cider sales last year because of the Covid-19 pandemic.
The report found that the rolling lockdowns on hospitality venues in Ireland increased cider purchases in the retail sector, but this was not enough to offset the loss of cider sales in pubs, restaurants, and hotels. Typically, around 45% of cider purchases were in the on-trade, with 55% in the off-trade. However, in 2020 just 16% of cider was sold in the on-trade, with 84% of sales in the off-trade, illustrating the massive shift in purchasing patterns.
The Covid impact on cider, which is heavily reliant on the on-trade, meant that its market share of alcohol beverages fell from 7.4% in 2019 to 6.9% in 2020.
The report also found that the value of cider exports declined last year by 2.7% to €58.2 million. About 90% of cider exports go to the United Kingdom, and other export destinations include the US, Australia, New Zealand, and France.
The report also highlighted that Ireland has the third highest excise rate on cider in Europe, after Finland and Sweden. In the past ten years over half a billion Euro worth of excise receipts has been collected from cider sales in Ireland.
The sector has called for additional financial aid to support the coverage of costs associated with the uplift of kegged cider during the recent lockdowns, in addition to the excise relief for craft cider producers. An excise relief programme for small producers, similar to the one enjoyed by craft brewers, could be set up at a minimal cost to the exchequer, Drinks Ireland|Cider has said, and result in a number of downstream benefits to other sectors including agriculture, hospitality, tourism and retail.
Brewers that produce less than 50,000 Hectolitres of beer per annum get a 50% reduction on excise payments to the exchequer. Until 2020, the EU Structures Directive on Excise only permitted excise relief for brewers. This has now been extended to small producers of fermented beverages like cider.
Seamus O’Hara, Founder and CEO of Carlow Brewing Company, which produces Falling Apple and Craigies Cider, and Chair of Drinks Ireland|Cider said:
“The Irish cider industry has had a challenging year and any assistance from the Government would be welcome. The excise relief programme for Ireland’s craft brewers saw the number of breweries increase from 3 to 75 in the space of a decade. Extending this programme to craft cider producers could result in further growth in the sector which will ultimately benefit the consumer with more choice.”
Jonathan McDade, Head of Drinks Ireland|Cider said: “With outdoor hospitality commencing from June 7th, and growing optimism about the opening of indoor hospitality in July, the cider sector is hopeful of some recovery in the second half of this year. While cider consumers reconfigured their drinking habits last year, with a shift to retail, the on-trade is critically important for the sector.”
Media contact – Colin Taylor, Q4PR, 0864671748