Australia's cider makers are bracing themselves ahead of the May budget as their counterparts in the spirits industry call for the government to apply a higher tax to their products.
The industry's representative, Cider Australia, who's membership is largely comprised of boutique producers, is worried that the Distilled Spirits Industry Council of Australia (DSICA) is made up of foreign-owned identities who have the money and power to lobby effectively in Canberra.
This week Cider Australia made headlines after it sent a letter to members of parliament opposing claims by DSICA that cider currently enjoys a massive and unfair price advantage over ready to drink (RTD) spirits.
It’s also said in a media statement that a push to tax small cider producers in the same way as international liquor giants would “decimate regional apple-farming communities and the craft cider producers that have set up business in these regions”.
If the government agrees with DSICA, it could reap almost $500 million extra in annual revenue and the tax on cider could triple.
It’s the second year DSICA has called for this change in a pre-budget proposal paper since Australia’s local cider industry rocketed into existence in recent years.
DSICA spokesman, Stephen Riden, told Food & Drink Business that alcohol taxes shouldn't be used as a form of industry protection.
“With a government desperate for new sources of revenue, we hoping it's our year,” he said.
Cider Australia, meanwhile, has pointed out that flavoured ciders – those with added flavours or colouring – already attract the same tax rate as RTDs.
Its president, James Kendell, told Food & Drink Business that traditional cider's current tax classification, which is the same as fruit wine, made the most sense.
“Traditional non-flavoured ciders are like fruit wine. Our products are made from apple or pear and and we use the same processes, so logically speaking, this should be the category that we fall into,” he said.
