Budget Resolutions and Economic Situation — 2. Sparkling cider (rate of duty) — 15 Mar 1999

The Aye voters passed clause 1 of the Finance Bill 1999 which increased the duty on sparkling cider and perry as follows:

"(1) In section 62(1A)(a) of the Alcoholic Liquor Duties Act 1979, for "£45.05" there shall be substituted "£161.20".

(2) This Resolution shall have effect as from 6 o'clock in the evening of 9th March 1999."

The reason for this significant increase can be seen from the Treasury's notes on the clauses of the Finance Bill 1999. As it says:

"Infraction proceedings against the UK were threatened by the European Commission in 1995, alleging that sparkling cider (mainly domestically produced) had a duty advantage over competing lower-strength sparkling wine (mainly imported). The products are often similar in taste and alcoholic strength and some were being offered for sale with very similar presentations."

Since lower-strength sparkling wine was subject to a higher duty, the lower duty on sparkling cider was distorting competition hence why the government chose to significantly increase the duty on the latter.

Historical Hansard | Online Hansard |