By Matt Scuffham
LONDON, March 24 (Reuters) - UK Chancellor Alistair Darling hit high-strength ciders blamed for binge drinking with a sharp duty hike in his budget on Wednesday, adding up to 2 pounds (US$3) to the price of a litre of so-called white cider.
Darling targeted brands such as White Lightning and Diamond White, which have alcohol content of over 7.5 percent.
'The industry has a very clear choice -- it can either see this extra duty imposed or it can choose to reduce the alcoholic strength of its ciders,' a Treasury official, who asked not to be named, told Reuters.
The government is increasing the overall tax on alcoholic beverages by 2 percent above inflation apart from cider, for which the tax will rise by 10 percent above inflation. The increases are due to take effect on Sunday, April 4.
Taxes on normal-strength ciders will increase by 10 percent above inflation, adding 5 pence to a litre bottle of average strength cider. High-strength ciders will be taxed at a higher rate.
A spokesman for Heineken, Britain's biggest cider maker with brands like Strongbow and Bulmers, said he was confident the industry could weather the increased duties.
The spokesman, who asked not to be named, said the price of its best-selling Strongbow would increase by 2.8 pence a pint compared with an increase of 2p on a pint of beer.
Irish drinks group C&C confirmed reports that it would absorb the duty increase on its Magners brand.
Drinkers group Campaign for Real Ale (CAMRA) was critical of the increases, saying they would threaten the future of small cider producers.
'Hitting small real cider producers with this hike will cause irreparable damage to one of the nation's most historic craft industries. The government must introduce a relief package to support the UK's small cider producers,' said Mike Benner, chief executive of CAMRA.
UNHAPPY PUBS
Britain's pub industry reacted angrily to Darling's decision to extend the government's commitment to raise duty on other alcoholic drinks by 2 percent above inflation for another three years until 2015.
The action will put 2 pence on a pint of beer, 10 pence on a bottle of wine and 36 pence on a bottle of spirits from midnight on Sunday.
Industry group British Beer & Pub Association (BBPA) condemned the increases, noting that over 4,000 pubs have closed in the last two years, resulting in 40,000 lost jobs.
'There had been some signs of improvement in our industry but this recovery will be threatened by Darling's tax rise, which is putting hundreds more pubs and thousands more jobs at risk,' BBPA Chief Executive Brigid Simmonds said.
CAMRA said the hikes would put the future of thousands of community pubs at risk and predicted that beer prices would subsequently rise by up to 20 pence a pint in many pubs.
'With nearly six pubs a day still closing, what community pubs and pub goers needed today was a lifeline, not a death knell,' said CAMRA Chief Executive Mike Benner.
Darling also said duty on a pack of cigarettes would immediately rise by 1 percent, then by 2 percent above inflation each year until 2014.
(Editing by Mike Nesbit, Toni Reinhold) ($1=.6664 pounds) Keywords: PUBS BUDGET/REACTION (matthew.scuffham@reuters.com; +44 20 7542 6734) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
LONDON, March 24 (Reuters) - UK Chancellor Alistair Darling hit high-strength ciders blamed for binge drinking with a sharp duty hike in his budget on Wednesday, adding up to 2 pounds (US$3) to the price of a litre of so-called white cider.
Darling targeted brands such as White Lightning and Diamond White, which have alcohol content of over 7.5 percent.
'The industry has a very clear choice -- it can either see this extra duty imposed or it can choose to reduce the alcoholic strength of its ciders,' a Treasury official, who asked not to be named, told Reuters.
The government is increasing the overall tax on alcoholic beverages by 2 percent above inflation apart from cider, for which the tax will rise by 10 percent above inflation. The increases are due to take effect on Sunday, April 4.
Taxes on normal-strength ciders will increase by 10 percent above inflation, adding 5 pence to a litre bottle of average strength cider. High-strength ciders will be taxed at a higher rate.
A spokesman for Heineken, Britain's biggest cider maker with brands like Strongbow and Bulmers, said he was confident the industry could weather the increased duties.
The spokesman, who asked not to be named, said the price of its best-selling Strongbow would increase by 2.8 pence a pint compared with an increase of 2p on a pint of beer.
Irish drinks group C&C confirmed reports that it would absorb the duty increase on its Magners brand.
Drinkers group Campaign for Real Ale (CAMRA) was critical of the increases, saying they would threaten the future of small cider producers.
'Hitting small real cider producers with this hike will cause irreparable damage to one of the nation's most historic craft industries. The government must introduce a relief package to support the UK's small cider producers,' said Mike Benner, chief executive of CAMRA.
UNHAPPY PUBS
Britain's pub industry reacted angrily to Darling's decision to extend the government's commitment to raise duty on other alcoholic drinks by 2 percent above inflation for another three years until 2015.
The action will put 2 pence on a pint of beer, 10 pence on a bottle of wine and 36 pence on a bottle of spirits from midnight on Sunday.
Industry group British Beer & Pub Association (BBPA) condemned the increases, noting that over 4,000 pubs have closed in the last two years, resulting in 40,000 lost jobs.
'There had been some signs of improvement in our industry but this recovery will be threatened by Darling's tax rise, which is putting hundreds more pubs and thousands more jobs at risk,' BBPA Chief Executive Brigid Simmonds said.
CAMRA said the hikes would put the future of thousands of community pubs at risk and predicted that beer prices would subsequently rise by up to 20 pence a pint in many pubs.
'With nearly six pubs a day still closing, what community pubs and pub goers needed today was a lifeline, not a death knell,' said CAMRA Chief Executive Mike Benner.
Darling also said duty on a pack of cigarettes would immediately rise by 1 percent, then by 2 percent above inflation each year until 2014.
(Editing by Mike Nesbit, Toni Reinhold) ($1=.6664 pounds) Keywords: PUBS BUDGET/REACTION (matthew.scuffham@reuters.com; +44 20 7542 6734) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.