Somerset Cider Makers Face 61% Duty Rise on Bottles by February

By next February, tax on a standard 50cl bottle of Burrow Hill cider will have risen 61%, according to the Somerset farm's director, Matilda Temperley. Her warning cuts to the core of a question now facing Britain's cider industry: whether traditional producers can keep using British-grown apples at all.

Several established cider businesses say rising costs could force the industry to reduce its reliance on British apples. Higher alcohol duty, energy bills and packaging costs are making it harder to stay profitable, according to a producer in Somerset.

Who is sounding the alarm?

Burrow Hill farm near Martock has grown apples for 300 years. Temperley said recent increases had added to pressures the industry already faced. At 6% alcohol, the farm's traditional cider is taxed at a higher rate than mass-produced cider.

"By next February, we will have seen a 61% increase in tax on our standard 50cl bottles," Temperley said.

She welcomed a rise in Small Producer Relief but said other mounting costs outweighed it. "We've got huge, energy costs, then almost a 90% increase in tax costs since 2020," she said.

Her sharpest concern is structural, not personal. Large cider makers facing the same cost base will look for savings, and she argues there is only one obvious place to find them.

"The thing that will happen is that if you're a big cider maker, you're going to look to cut your costs and the only way to cut costs is to stop using British apples," she said.

"That's a real tragedy because cider should be made from these beautiful orchards."

The mechanism is simple. Apples grown in British orchards cost more than imported pulp or concentrate. When duty, energy and packaging squeeze margins, the raw material becomes the variable producers can still control.

What is driving the cost pressure?

Isaac Stell, a financial analyst at Wealth Club in Bristol, placed the industry's troubles in the context of the recent budget. Having pledged not to raise the main rates of income tax, national insurance or VAT for working people, he said the budget focused on other areas to "help plug the fiscal hole."

Producers are also dealing with higher employer National Insurance contributions and increases in the minimum wage, Stell said.

He expects the costs to travel down the supply chain rather than stop at the farm gate. "Inevitably, some of those additional costs will find their way through to the pubs, clubs and restaurants that producers supply, and ultimately to an already squeezed consumer," he said.

How are other producers responding?

Not every Somerset producer reads the situation the same way. The Showerings family, known for producing Babycham, has made drinks in Shepton Mallet for more than 14 generations.

"Our business has grown a lot in the last ten years - we've gone from having 80 employees to around 350 now," managing director Matthew Showering said. "We've had a good couple of years, we're making drinks that are popular and growing."

Showering acknowledged rising costs but said he would rather see less government intervention than more support.

"We don't want any help from the government, we'd rather they keep out of things as much as possible," he said.

Matt Gillett from Tricky's Cider in Low Ham occupies a different position again. The size of his operation makes him eligible for Small Producer Relief, but he said the benefit will be limited because Alcohol Duty is a "fairly substantial" part of his monthly outgoings.

Gillett remains optimistic. He ruled out importing pulp or concentrate to cut costs.

"We are a craft producer here in Somerset and are proud of the fact we take from local orchards, traditional orchards, and use the fruit that is available here in this county," he said.

What is the government's answer?

The government says it is supporting the sector by increasing the value of Small Producer Relief, which provides lower alcohol duty rates for some smaller and medium-sized producers.

A Treasury spokesperson said: "The cider industry makes a vital contribution to our rural economy and communities, and cider continues to benefit from significantly lower duty rates than other alcoholic drinks."

"But we know the industry is facing continued pressures, which is why the Budget provides additional support by cutting costs for pubs and bars that are vital customers for the industry and poured pints continue to benefit from draught relief."

The Treasury's argument rests on two pillars: cider's duty rates are already lower than those on other alcoholic drinks, and the Budget cuts costs for the pubs and bars that buy cider, alongside draught relief on poured pints.

What happens to the orchards?

The divide among producers is telling. A 14-generation family firm with 350 staff says business is growing and wants no help. A 300-year-old orchard farm calculates a 61% duty increase on its bottles and a 90% rise in tax costs since 2020. A craft producer absorbs the duty but refuses to abandon local fruit.

The common variable is the orchards. Relief schemes soften duty bills for smaller producers, but they do nothing for the cost gap between British apples and imported concentrate. If large cider makers take Temperley's predicted route, the decision will reshape not just bottle labels but the Somerset countryside itself.