Tax to crush Tasmanian cider producers

25 Feb 2013

A push to tax small cider producers in the same way as international liquor giants would decimate small apple-farming communities in regional Tasmania.

Cider Australia is demanding the Federal Government maintain a fair taxation system that will support Australian primary producers in line with the wine industry.

The Distilled Spirits Council of Australia, made up of foreign heavyweights including Bacardi, Diageo and Jim Beam, is pushing the Federal Government to change the way cider is taxed from the Wine Equalisation Tax to a volumetric tax the same as RTDs.

DSIC argues that the change would boost the Federal Government’s Budget by $89 million dollars a year.

“What they don’t say is how much damage this would do to small communities across the country,’’ Cider Australia President James Kendall said.

More than 30 direct Tasmanian jobs would be in jeopardy and apple farmers would lose major contracts to sell their fruit locally if the Federal Government bows to this bullying.

“DSICA is a bunch of faceless men who have the money and power to lobby politicians in Canberra. Cider Australia is a volunteer organization,’’ Mr Kendall said.

“Cider supports agriculture and regional farming communities. The main ingredient in cider is apples and the ability for apple growers to sell the apples which are unable to be sold to the supermarkets for juice provides an important income stream and enables existing apple and pear orchards to be sustainable.

“The growth in cider is helping some of these communities which have been doing it tough for a number of years with the high Australian dollar cutting off exports and the opening up to the Australian market to New Zealand apples.’’

Mr Kendall said there was already provision under the current legislation for flavoured or coloured beverages – such as Rekorderlig and Strongbow – to be taxed as an RTD. It is Cider Australia’s understanding that those companies making flavoured or coloured ciders are paying the correct RTD tax for those products.

“This push to implement a new system on small producers, who are using local products, employing local people and boosting local economies, is nothing but bullying,’’ Mr Kendall said.

Willie Smith’s Organic Cider owner Sam Reid, the new Cider Australia Vice President, said if the tax was altered in this May’s Federal Budget, it would put in jeopardy his million dollar expansion plans, which include a new apple industry history museum in the Huon Valley.

“The Federal Government needs to look past the short-term financial benefits being espoused by DSIC in favour of supporting and building upon strong, regional communities who are trying innovative, new things,’’ Mr Reid said.

“Building a strong manufacturing base and supporting regional communities is critical to the future of Australia and the Australian culture’’.

For more details please contact James Kendall or Sam Reid on 0434 734 797.