Tax-hike plan upsets the apple cart

THE owner of Borenore’s Small Acres Cyder, James Kendell, says a proposed tax hike on traditional cider will not only jeopardise his business but will impact apple and pear growers throughout the country.

Mr Kendell, who owns the Akhurst Road operation with his wife Gail, admits he may be forced to close his doors if the federal government backs a proposal to tax traditional cider at the same rate as pre-mixed spirits.

In the lead-up to the federal budget in May, the Distilled Spirits Industry Council of Australia has delivered a budget proposal paper calling for a tax increase on traditional cider that will at least triple its cost.

“If this happens it will have a huge impact on us and whether we survive or not remains to be seen,” said Mr Kendell,  the president of Cider Australia, a coalition of cider growers, producers and manufacturers that’s fighting the tax jump.

 At the moment cider or apple wine is taxed under the wine equalisation tax scheme and Cider Australia is demanding it stays that way.

“We want the status quo to remain,” Mr Kendell said.

Mr Kendell said there were a number of flavoured or coloured ciders that were already taxed at a higher rate, however the more “traditional” ciders, made from apples and pears, were taxed at a lower rate, equivalent to wine.

“An increase in tax will impact on prices and the customers will react,” Mr Kendell said.

Mr Kendell said Cider Australia was not just trumpeting the cause of cider manufacturers. He said tax increases would also impact apple and pear growers everywhere.

“This will be devastating for us as cider producers but it will have a widespread impact on orchards and agriculture in Australia,” he said.

“We predict a 30 percent drop in sales and that will not just impact on us, it will also affect growers.”

Mr Kendell said the main ingredient in cider was apples, and the ability of apple growers to sell apples that are unable to be sold to the supermarkets for juice provided an important income stream and enabled 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 of New Zealand apples.’’ Mr Kendell said.

Mr Kendell said Australia’s cider industry was still developing so an increase in the price of cider would turn drinkers to beer or wine.

He said the government would be “misguided” if it didn’t consult with the industry on the impact the tax increase would have.

tracey.prisk@fairfaxmedia.com.au

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