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Budget 2017: Treasury to open consultation on new tax band for white cider

Today’s Spring Budget sees the government announcing that it will launch a consultation looking into introducing a new tax band for still cider just below 7.5% abv, to target white ciders.

The statement, published by HM Treasury, came as Chancellor Philip Hammond MP announced that alcohol duties would rise in line with RPI inflation.

Responding to the proposals, Katherine Brown, Director of the Institute of Alcohol Studies said:

“The announced consultation on high-strength cider in today’s Budget is a promising sign that the government is serious about tackling alcohol harm amongst our most vulnerable groups. Cheap drink wrecks lives, so it is right to make these products less accessible to children, homeless and dependent drinkers.

“All the evidence shows that raising the price of alcohol is the most powerful tool governments can use to tackle harm.

“The incredibly low level of tax on high-strength ciders – the cheapest products on the market – has been identified as a problem by the Institute for Fiscal Studies, The Alcohol Health Alliance, and The All Party Parliamentary Group on Alcohol Harm.

“It is unacceptable that a three-litre bottle of white cider – equivalent to 22 vodka shots – is available for £3.50. It is also unaffordable that 167,000 years of working life are lost each year to alcohol in England.

“We hope that the government will take heed and act in order to save lives.”

Professor Sir Ian Gilmore, Chair of the Alcohol Health Alliance, said:

“Whilst we would have liked to see the Chancellor increase duty on the cheapest alcohol today, we are encouraged to see that the government will be consulting on introducing a new duty band for high-strength ciders, which would mean these ciders are taxed at a higher rate.

“At the moment, it is possible to buy a three-litre bottle of 7.5% ABV cider, containing the equivalent amount of alcohol as 22 shots of vodka, for just £3.50. As a result of these low prices, these drinks are a favourite among children and vulnerable groups like the homeless.

“High-strength cider currently receives the lowest duty per unit of any alcohol product, and the government clearly recognises the need to address the anomalies in the tax system which mean that these ciders can be taxed at such low rates. Dealing with these anomalies in the tax system would target those most in need, and would move the tax system towards a more sensible scheme where the stronger alcohol is, the more highly it is taxed.

“By taxing these drinks more strongly, the government will also encourage producers to lower the alcohol content in the drinks.”

The Budget paper will also see a consultation on the impacts of introducing a new duty band for still wine and made-wine between 5.5% and 8.5% abv.

Both consultations fuel the prospect that changes to the alcohol duty system will be made when Philip Hammond delivers his second Budget to the House of Commons later on this year.