The Chancellor's 13.1% hike in cider duty could reverse the growth of an industry that has recently invested millions of pounds in new orchards and would hit the smallest producers hardest, makers have warned.

Cider duty was ramped up by 10% above inflation in the Budget, and the duty escalator on beer, wine and spirits was extended for another two years.

Magners owner C&C Group has already told customers it will absorb the cider duty rise on Magners, but smaller manufacturers warned the tax increases would be a burden. "Cider is a true British success story, but the huge duty increases announced in the Budget will undo much of this good work," said Matthew Showering, MD of Brothers Drinks. "Cider is much more expensive to produce than other types of drinks and it helps support the economy in many rural areas."

Added Harry Turner, cider communications manager at Bulmers: "We're disappointed effectively to be victims of our own success. We've invested significantly, as have others, and premiumised the category making it successful and in growth, when beer isn't."

HMRC is also considering the possibility of a new band of duty for higher-strength cider from September.

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