The ObserverCider This article is more than 12 years old

White cider is becoming like heroin among alcoholics, says report

This article is more than 12 years oldSuper-strength ciders are becoming popular among heavy drinkers as tax breaks to protect the industry make them a cheaper fix

It may be cheap, but white cider, the drink of choice for many homeless alcoholics, commands big profits.

A new report by the charity Alcohol Concern suggests profit margins on white cider are significantly fatter than those on other alcoholic drinks, thanks in part to tax breaks designed to help traditional British cider makers.

Cans of brands such as White Ace, Carbon White and White Star sell for as little as 59p. "It's because it's so cheap and it has a very quick effect on you," said Gordon Cowper, 52, a recovering alcoholic who now works for the homelessness charity Thames Reach in London.

"Most drinks are quite hard to drink, like whisky and stuff like that. With cider, you put a little bit of lemonade in it with the first one and then you can start knocking it back."

The report reveals that the Treasury takes 32p in VAT and duty on the sale of an 85p can of White Ace, leaving a remainder of 53p. By contrast, a super-strength lager such as Kestrel sells for £1.20 a can, of which the Treasury takes £1.04, leaving 16p.

The difference between the two drinks means retailers can sell strong cider far more cheaply than strong lager and still enjoy large profit margins.

A spokesman for Bestway, the cash-and-carry operator that owns the White Ace brand, confirmed it "sells very well", but declined to give figures.

Cider contributes more than £1m a day to the exchequer, but it is taxed at a lower rate than other alcoholic drinks to protect the traditional cider industry, primarily to allow for investment in orchard development.

Following the rise in alcohol tax in the budget, cider up to 7.5% in strength attracts a lower rate of duty at £35.87 per hectolitre (100 litres) than standard 4% beer or lager that attracts a duty of £74.28.

Tony Waters, a long-serving manager at a Thames Reach hostel, said price had been the major factor in homeless people migrating from weak to strong cider in recent years. "Nowadays people won't drink ordinary-strength ciders, they don't see it as strong enough, basically," he said.

Tony Goodall, the report's author, estimated that about half the white cider drinkers he interviewed claimed to drink more than three litres a day. "Most have an incredibly detailed knowledge of the price variations," Goodall pointed out. "Some of the small shops were willing to give them credit if they were sure of payment when their welfare payments were received. Other shopkeepers were prepared to sell below the prices on the shelves to these very regular customers."

Many said they believed the drink produced far more stomach problems than other forms of alcohol. Several described a burning sensation as they drank the cider.

Jeremy Swain, chief executive of Thames Reach, said: "You see techniques like when they [white cider drinkers] drink out of a can, they'll pierce a hole in the end to release the gas and down it very quickly as the lack of bubbles means a quicker hit to the brain. It bears a likeness to that of a heroin addict who will inject into the groin because it produces the fastest effect."

A backlash against the drinks has already seen Heineken discontinue its White Lightning and Strongbow Black brands.

However, a manager at Aston Manor, another white cider manufacturer, told Goodall: "If you take all the white ciders in the UK, it accounts for 0.1% of alcohol consumption and is being abused by a small percentage of people. Problem drinkers are a social issue, not an economic issue."

Attempts to increase the tax on cider to curb the problem have proved to be controversial. The Labour chancellor Alistair Darling tried to impose a 10% tax rise above inflation on cider, compared with a 2% increase for other alcoholic drinks. But the plan was shelved amid a furore from the cider industry. The coalition government tried to differentiate white ciders from traditional ciders in the Alcoholic Liquor Duties Order.

Until recently, cider could be made with minimum apple content, in some cases as little as 7%. The new order establishes that ciders must have a minimum apple juice content of 35%. But with the majority of the apple content now sourced from eastern Europe, rather than English orchards, achieving the minimum level has been an inexpensive exercise.

Goodall explained: "The UK doesn't produce sufficient sweet apples to meet the blending demands of the cider industry, which is why its producers need to import culinary concentrate. New strains of apple are being developed locally, but it takes five years for trees to produce any significant crop."

Apple concentrate prices have historically been very cheap abroad, although poor harvests in Poland may now start to push prices up. But by importing the concentrate, white cider manufacturers have been able to avoid the high set-up costs of orchard planting and milling, and are also able to source their key ingredient – along with corn syrup – throughout the year.

There are predictions that super-strength cider will become more popular later this year. From October, duty on beers above 7.5% in strength will rise by 25%. Experts suggest this will see more super-strength lager drinkers switch to cider as they attempt to save money.

Alcohol Concern and a coalition of homelessness charities want a ban on strong cider being sold in anything larger than one-litre bottles.

"We also want to see the Department of Health commission neurological research into prolonged exposure to white cider," said Charles Fraser, chief executive of St Mungo's, the homelessness charity. "We can't understand why the problem of alcohol dependency isn't a bigger priority. The cost in human lives is appalling."

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