The Chancellor has whacked up the duty on cider by 10% above the rate of inflation.

In his Budget speech today, Alistair Darling said he would increase the duty on strong cider even further from September.

"There is a long-standing anomaly which has meant cider has been under-taxed in comparison to other alcoholic drinks," Darling said.

"In September changes will be made to the definition of cider to ensure specific strong ciders are taxed more appropriately."

A spokesman for the National Association of Cider Makers said the news was "disappointing" but that the category could continue to be one of the drinks industry's success stories.

Darling pressed ahead with his other planned duty increases, despite protests that they would hurt businesses.

Duty on beer, wine and spirits will increase by 2% above inflation and will continue to do so for the next four years under a two-year extension of his ‘duty escalator’ programme.

Duty on tobacco will increase by 1% above inflation and by 2% above inflation every year until 2014.

The 3p rise in fuel duty will be staggered. A 1p increase will be added in April, with further 1p hikes in October and next January. The first wave of hikes takes effect from midnight on Sunday.

Darling declined to raise VAT, however, in boost for retailers. And business rates are to be cut for a year from October, meaning a tax reduction for 500,000 small firms in England, he added.

News of the hikes was met with widespread dismay by the industry.

“On 1 January the Government imposed the largest tax increase on tobacco products in 10 years and now, less than three months later, taxes are to rise again," said Christopher Ogden of the Tobacco Manufacturers’ Association.

"We question why HM Treasury would impose a substantial increase in such a short period, when latest figures show that up to 24% of the cigarette market and 63% of the handrolling market still avoids UK duty.

"Today’s announcement will only provide further stimulus to those who seek to profit from the illicit trade in tobacco."

Brigid Simmonds of the British Beer & Pub Association added: "This latest beer tax hike piles on the misery for Britain's hard-pressed pubs and beer lovers. It is also a snub to voters, who by a majority of two to one wanted the Chancellor to scrap the beer tax escalator.
"Since 2008, beer tax has increased by an eye-watering 26% [and] sales are down £650m in the last year alone."

Today’s announcement marks Darling’s final Budget before the looming general election, which is expected to take place on 6 May.