SCHUMER: RECENTLY PASSED CIDER ACT WILL BE A SWEET SUCCESS FOR CAPITAL REGION & UPSTATE NEW YORK APPLE PRODUCERS; SENATOR, JOINED BY LOCAL HARD CIDER PRODUCERS, REVEALS HOW NEW LEGISLATION MEANS FOR CAPITAL REGION & THE UPSTATE NY REGIONAL ECONOMY

Schumer Bill – The CIDER Act – Lowers Taxes On Hard Cider, Now Treated Like Beer Rather Than Higher Taxed Wine; Benefits Allows Producers that Often Suffer from Frost & Bad Weather to Add New Stable Source of Income

The Capital Region Has More Than 200 Apple Growers; Legislation Will Boost Business For Growers and Hard Cider Producers Like Nine Pin & Slyboro

Schumer: NY Could Soon Be At The Core of Hard Cider Production

Standing at Nine Pin Ciderworks in Albany, NY, U.S. Senator Charles E. Schumer today revealed how the recently passed CIDER Act will help boost the Capital Region’s and Upstate New York’s growing hard cider industry. Schumer said his legislation will dramatically help growers add highly popular hard cider product lines and improve the ability for Capital Region apple growers and other Upstate New York growers to compete overseas.

“The passage of the CIDER Act is a win-win for everyone, from our New York apple growers, to our hard cider producers who will finally benefit from the fair taxation of hard cider. New York is the second largest apple producing state in the country, and there's no doubt it should be at the core of the hard cider industry. Now that this legislation has been passed, apples that would have otherwise been sold at a loss or thrown away, will be ripe for the cider press. By modernizing the definition of hard cider, our hard cider industry will pay less in taxes and be able to expand and compete,” said Schumer. “The CIDER Act is now set to increase New York growers’ and producers’ ability to compete overseas and expand their business for years to come.”

In February 2015, Schumer announced the Senate Finance Committee passed the CIDER Act; bipartisan legislation he first introduced in 2013. Now, the CIDER Act has been included in the recently passed tax extenders legislation, the Protecting Americans From Tax Hikes Act of 2015. Schumer called this a major win for the hard cider industry and for producers in the Capital Region like Nine Pin Ciderworks. In fact, according to 2012 data from the U.S. Department of Agriculture’s (USDA) National Agricultural Statistics Service (NASS), there are approximately 1,365 orchards, with 47,148 acres, across New York State that could benefit from this tax credit if they produce hard apple cider. In the Capital Region alone, there were 204 orchards as of 2012:

-          In Albany County, there are 11 orchards that could benefit.

-          In Columbia County, there are 34 orchards that could benefit.

-          In Fulton County, there are 9 orchards that could benefit.

-          In Greene County, there are 19 orchards that could benefit.

-          In Montgomery County, there are 14 orchards that could benefit.

-          In Rensselaer County, there are 23 orchards that could benefit.

-          In Saratoga County, there are 30 orchards that could benefit.

-          In Schenectady County, there are 6 orchards that could benefit.

-          In Schoharie County, there are 20 orchards that could benefit.

-          In Washington County, there are 38 orchards that could benefit.

Schumer explained that the alcohol content of hard cider fluctuates greatly due to sugar content, and current law often forces it to be taxed at a higher rate, preventing it from being labeled as hard cider. Under the previous federal law, the outdated definition of hard apple and pear cider only allowed for up to 7 percent alcohol by volume before it is taxed at the higher alcohol per volume rate of wine, and only a certain level of carbonation before it is subject to the champagne tax. Schumer said that many of New York’s hard cider producers – like Nine Pin Ciderworks in Albany – are small craft hard cider operators, and because they rely on natural products, there was very little predictability and control over the precise alcohol content of their product. In addition, some consumers of hard apple cider expect a high level of carbonation as a substitute for beer, and current federal tax law doesn’t permit the desired amount without classifying the product as champagne. In both cases, hard cider fell into a different beverage categories, which made ciders subject to higher alcohol excise taxes, and complicates labeling issues.

Schumer said that, under previous federal law, the outdated definition of hard cider only allowed for hard cider’s alcohol content to reach up to 7 percent alcohol per volume before it was taxed at the higher rate of wine, and only a certain level of carbonation before it was taxed at the even higher rate of sparkling wine. Compliance added a significant financial burden to producers and consumers, and an unpredictable nature to the business, making it less attractive for potential new hard cider producers. By providing this revised definition for hard apple and pear cider in his new legislation, and thereby increasing the alcohol by volume from 7 percent to 8.5 percent and carbonation level allowed, producers and growers could encompass significantly more hard cider products. This will now allow their products to be labeled and taxed like hard cider, rather than wine. In 2013, Schumer first argued this would allow the over 650 apple growers and 20 existing hard apple cider producers at the time to expand their business.

Producing hard cider offers major benefits to apple orchards, whether they choose to increase production and add additional acres of “hard cider trees,” or if farmers simply use existing products to diversify their business. Most importantly, apple and other fruit growers who have suffered from frosts and bad weather in recent years have benefited from adding hard cider into their business model, as it is not nearly as susceptible to these unpredictable occurrences. Some producers grow specific varieties of apples to produce hard cider, while other producers can use apples from their crops that have been damaged by storms. Hard cider can also be made from apples that are high quality, but that are not as aesthetically pleasing to sell on a farmer stand, and that would otherwise be sold at a loss or thrown away.

In addition, hard cider is a value-added product, and can reign in significant value for producers than simply selling the same apples. Hard cider is sold around the same price every year; therefore it gives producers a stable source of income when apple crops suffer due to weather and other unforeseen factors. New York apple producers are increasingly interested in producing smaller, artisanal batches of hard cider, but cite the cost and difficulty to comply with the IRC definition as significant impediments to expanding their businesses. Schumer said the federal definition of hard cider under the IRC is restrictive to both current producers as well as those hundreds of growers that would like to enter production of this craft beverage.

Schumer was joined by Alejandro Del Peral, Founder of Nine Pin Ciderworks, Jake Samascott, from Samascott Orchards and Duane Lindsey, from Lindsey Country Store.

“Nine Pin and our partner orchards are excited about the passage of the federal CIDER Act and we appreciate Senator Schumer's efforts on this critical piece of legislation for the craft hard cider industry. As our company continues to promote New York agriculture by producing great-tasting New York hard cider, the CIDER Act more fairly addresses our tax liability under the law, allowing for us to expand our markets and permitting us greater freedom to create different styles of cider for our fans to enjoy,” said Alejandro del Peral, founder and cider maker, Nine Pin Cider Works.

“Being a small family owned apple grower, we are excited to partner with NinePin Ciderworks and to be part of the growth of the hard cider industry.  We are proud to produce apples and cider in the great state of New York and are happy to have an additional way to sell our product,” said Duane Lindsey, of Lindsey's Country Store.

“We at Slyboro Cider House are celebrating Congress' recent passage of the CIDER Act!  I very much appreciate the work of Senator Schumer and his staff, and were thrilled to host them for the announcement of the creation of the CIDER Act April of 2013. This bipartisan and broadly supported bill makes much needed and sensible changes to the legal definition of hard cider which will expand opportunities for craft beverage makers and apple orchardists across the country,” said Dan Wilson, Owner of the Slyboro Cider House. This is how government should work!”

Nine Pin Cider was co-founded by Alejandro del Peral and Sonya del Peral, a mother-and-son team, in 2013. Nine Pin produces bottle, can and wholesale products using local produce sourced by local orchards in the Capital Region, including Lindsay's Orchard in Rexford. The introduction of can products in 2015 greatly expands the company's ability to enter new markets.

New York is the second largest apple producer nationwide, harvesting a total of 29.5 million bushels annually from over 650 farms and 41,000 acres across the state. In recent years, thanks to the growing popularity of hard cider, many apple producers have turned to producing this craft beverage to keep apple orchards profitable.

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