HM Customs and Excise  6
                                                17 March 1998
____________________________________________________________

DUTY ON LOW STRENGTH SPARKLING WINE AND SPARKLING CIDER 
COME  CLOSER INTO LINE


The Chancellor announced today that the duty on low strength
sparkling wine has  been cut by 20 per cent and the duty on
sparkling cider (and perry) has been  increased by 20 per
cent.  These are considered to be competing products of
similar  strength and are often sold in the same sort of 
packaging. As sparkling cider has a  lower duty rate, the
difference in duty is inconsistent. The changes announced go 
some way to addressing the resulting distortion of
competition. 

Financial Secretary to the Treasury, Dawn Primarolo said:

"These changes are an important next step in the process of
aligning the two rates  for these competing products.  The
rates will be fully aligned in the next Budget." 

DETAILS

1.  The new rates will take effect from 6 pm on 17 March
1998 and will cost 5 million  pounds per year. 

2.  The changes will have the following effect on the tax
(duty plus VAT) paid on an  average bottle :

Product                                        Effect


75cl bottle of low strength sparkling wine     - 36p
Litre bottle of sparkling cider                +  9p



NOTES FOR EDITORS

1.  In 1995 the European Commission considered infraction
proceedings  against the  UK alleging that sparkling cider
(mainly domestically produced) had a duty  advantage over
competing low strength wine (mainly imported).  The UK
negotiated  an agreement with the Commission to align the
duty rates on these two products.
 
2. The alignment is being undertaken in graduated steps to
enable small cider  producers to adapt to the change.  The
duty for these products will not be changed  as part of the
general increases in alcohol duties in January 1999.
 
3.  A first step was taken in the November 1996 Budget, when
a sparkling cider band  was created and the existing
sparkling wine band divided into two.  New duty rates  were
set for these bands.

4.   The revenue effects of these changes will be a cost of
5 million pounds on an  indexed base in the years 1998/99,
1999/2000 and 2000/01, and 5 million pounds on  a
non-indexed base in 1998/99. The impact on RPI will be
negligible.
 
5.     Details for traders are available in Budget Notice BN
69/98, which is available  from Customs and Excise Business
Advice Centres and from the Customs and  Excise Internet
site.

6.   Please see press release C&E 5 for details of other
changes to alcohol duties. 


Press enquiries only to HM Customs and Excise, Public
Relations Office, New  King's Beam House, 22 Upper Ground,
London, SE1 9PJ.  
Telephone:  0171 865 5468/5471

Others should contact their local VAT Business Advice
Centre, listed under  Customs and Excise in the telephone
book.

Others should contact their local Excise and Inland Customs
Business Advice  Centre, listed under Customs and Excise in
the telephone book.
 
Customs and Excise Internet address:
http://www.open.gov.uk/customs/c&ehome.htm

This news release can also be found at :
http://www.hm-treasury.gov.uk. Other Treasury material can
also be found at  this address.