OK. The story comes from this EU Commission press release;
Taxation: Commission requests the UNITED KINDGOM to amend its excise duty legislation granting exemption for cider and perry made by small producers
The European Commission has today formally requested the United Kingdom to amend its excise duty scheme that exempts from duty cider and perry made by small domestic producers. This exemption concerns producers, whose production does not exceed 70 hectolitres over a period of 12 consecutive months and who make such products for sale.The EU of course doesn't specify how much excise duty should be - and indeed it can be 0%, and actually is 0% in many EU nations. It also doesn't prevent a fast-track for simple nil returns from small scale producers; the full range of excise duties charged (January 2015) on cider by EU members can be seen HERE.
EU excise duty rules oblige Member States to levy an excise duty on alcohol and alcoholic beverages. There are no provisions which would provide for an exception to the general obligation to levy excise duty in respect of cider and perry made for sale by small domestic producers. The UK excise duty scheme therefore contravenes EU legislation, which was unanimously agreed and which does not allow for such exemption in any of the Member States.
The answer is wholly with the UK government. The suspicion of small cider makers is that Cameron's administration, so amenable to big-business interests, is acting on behalf of the industrial cider factories to squash small scale craft production. And the evidence does seem to point this way.
Of course Osborne could solve the problem with a zero rate for small producers but with a balancing increase in duty on ethanol (otherwise large producers would get the first 7,000 litres duty-free as well). Factory cider is made of ethanol, tap water and unfermented apple juice* with just enough real cider added to disguise the taste. Increasing the duty rate on ethanol would hit the big industrial alcopop and fake cider makers and leave the craft makers unaffected.
*I.e. like that in the pasteurised tetrapak cartons. Whether the apples were hand-picked by the migrant Mexican pickers at a Californian ranch or not is irrelevant.