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Ever Wonder Why Cider in Pennsylvania Is Almost Always 5.5% ABV or less?

by / Wednesday, 16 April 2014 / Published in Blog

7901453_ml (2)The short answer is that the Liquor Code requires it.  Alcoholic Cider is generally defined by the Liquor Code as a drink produced from the fermentation of any fruit or juice that does not exceed 5.5% ABV.  Any drink made from fruit containing more than 5.5% ABV is considered wine in Pennsylvania.  So what’s the big deal – why are all of the cider producers trying to stay below that 5.5% ABV line?  Why not just sell it as wine if the cider has a higher alcohol level?  There are a few very important reasons for why cider produces do not want to cross that line.  The first is distribution.  If the cider is 5.5% or less, it is treated similarly to beer.  As a result, a cider producer has all of the outlets available to brewers to sell its cider, including selling directly from its location or using distributors to get the cider into restaurants, bars, and six-pack shops.  This opens up far more avenues for getting the product to consumers than if it were sold as wine, which can only be sold directly by the winery (and its satellite locations), the state liquor stores (which can be difficult to get a product into), and potentially brewery pubs.  Another important reason to stay below the 5.5% ABV mark has to do with taxes.  As discussed in our last post, the excise taxes for alcoholic beverages vary greatly depending on how the beverage is classified.  Generally speaking, beer receives more favorable tax treatment (lower tax rates) than wine and liquor.  By keeping cider below 5.5% ABV, producers can stay within the beer tax rates, which reduces the cost to consumers.

There are currently two proposals under consideration at the federal level that would give cider producers more flexibility to produce cider without incurring the federal wine excise tax, but I am not aware of any current measures in Pennsylvania to alter the taxes here.  However, liquor reform is a hot topic in PA politics, and there are at least two proposals currently being shopped around.  We will wait and see if any proposed bill includes provisions for adjusting the tax rates.  In the meantime, keep an eye out for some very good Pennsylvania produced cider.

Cheers!

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