Finance

Cider makers fear future for orchards as costs grow

Source · BBC Business

Matilda Temperley is standing in a sunny orchard wearing a blue jacket and black polo neck. She has blonde hair tied back from her face and is smiling.

Image caption, Cider maker Matilda Temperley said the budget had been "disappointing"

ByLaura JonesMartock, SomersetPublished36 minutes ago

Rising costs could force the cider industry to reduce their reliance on British-grown apples, according to several well-established businesses.

Higher alcohol duty, energy bills and packaging costs are making it harder to stay profitable, according to a producer in Somerset.

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

Matilda Temperley, director of Burrow Hill farm near Martock, said it would be a "tragedy" to stop using its own apples due to climbing costs.

Temperley, whose farm has been growing apples for 300 years, said recent increases had added to pressures already facing the industry, adding at 6% alcohol, their traditional cider is taxed at a higher rate than mass produced cider.

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

She welcomed the rise in Small Producers Relief but said other mounting costs outweighed it.

"We've got huge, energy costs, then almost a 90% increase in tax costs since 2020."

"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".

Image source, Wealth ClubImage caption, Isaac Stell says ultimately it will be the consumer who pays

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

He said producers were also dealing with higher employer National Insurance contributions and increases in the minimum wage.

"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. "

Image caption, Matthew Showering said like his apples - his business is growing

The Showerings family, known for producing Babycham, has been making 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," the firm's managing director Matthew Showering said.

"We've had a good couple of years, we're making drinks that are popular and growing."

While acknowledging rising costs, Showering said he would rather see less government intervention.

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

Image source, SuppliedImage caption, Matt Gillett from Tricky's Cider with his apple picker Johnny

Matt Gillett from Tricky's Cider in Low Ham said the size of his operation means he will be eligible for the Small Producer Relief but adds he will not see a huge benefit as the Alcohol Duty is a "fairly substantial" part of his monthly outgoings.

Gillett remains optimistic, and said he would not consider 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."

A spokesperson for the Treasury 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."

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Man with dark hair and a smart navy suit stands in a Bristol street with his handed folded in front of him

A man stands in a blue shirt, high-vis jacket and cap against a stair railing. Behind him is the glass-fronted entrance to the building, as well as brick pillars and poles.

Two men stand next to each other looking at the camera, slightly squinting into the sun. Matt on the right is wearing a green tshirtm while Johnny on the right has a black tshirt on with a red bucket hat. They are stood next to an apple tree in an orchard, backed by rolling hills.