I RECENTLY lamented to my father, Esmond Bulmer, that small cider makers were to be asked to pay duty. He replied with his memories of facing the duty issue when he was an MP, which I thought Hereford Times readers might be interested to see.

He says: “At a Downing Street reception the PM, Margaret Thatcher asked me what I would like to drink. ‘A glass of Perrier, please,’ I replied. She looked irritated and seemed to require and explanation. ‘After what the government has done to our company, Bulmers, the only way I can presently maintain the jobs of loyal and hard-working people is by selling French water!’ “The increase in the duty on cider announced in the Budget was a disaster for HP Bulmer because it was far higher than the consumer was prepared to absorb. For the second time in a decade the Treasury had seriously destabilised the business.

“Our market capitalisation dropped dramatically, we had to shed almost 400 jobs and without family control we would surely have been taken over.

“Margaret Thatcher asked me to meet her later to make my case directly. I said in my view the Treasury is full of bright people, I’m sure, but they have not understood the consequences for jobs in our company of what they have done. The government wants us to invest and to make a contribution to the balance of payments by building an international business. Margaret said how sorry she was but that once the chancellor had delivered his Budget it was difficult to do anything about it.

“I remarked that she wanted Treasury civil servants to obtain outside experience but for them that meant the City, where, if they were any good, they were paid vastly more and were then unwilling to return. I reminded her that for Bulmers the sponsoring department with the Treasury was the Ministry of Agriculture and my impression was the Treasury had little regard for it.

“I subsequently learnt that the Minister for Agriculture had not been told about the effect of the duty hike and that actually the chairman of Bass advised the Treasury. The costs associated with brewing beer are very different to those of cider making and only required annual crops not the long-term investment made by farmers in planting and tending orchards – so they should have recognised the conflict of interest.

“I went on to say that, before the brewery groups became so big and the beer market switched increasingly to lager, Herefordshire had been a major producer of hops. As they were deprived of their income from hops, a number of farmers looked to cider fruit to fill the gap. The raw materials required for cider making are far more expensive than for beer. It takes 10 years for an orchard to reach break-even. We had encouraged large numbers of local farmers to grow cider apples, with a contract system and by investing in juice storage. A fall in cider sales impacts dramatically on our ability to invest in this way – did the Treasury understand this?

“I remember thinking that the huge investment in advertising to build a brand was also a subject with which the Treasury did not concern itself. The permanent secretary admitted to me that they had never done work on the contribution made by British brands to the balance of payments.”

Today Bulmers is still the largest cider maker in the world, but as a subsidiary of Heineken. I am pleased that it has become a family company again but could wish that we might learn from European countries the advantage of fostering native family businesses.

EDWARD BULMER Pembridge