Case Update - Tariff Classification of Cider Products and the impact of 'additives'


Case Update – Tariff classification of cider products and the impact of ‘additives’

This case concerns a dispute between an importer and the Australian Border Force (


Customs) about whether imported alcoholic apple cider was duty free or whether it was subject to excise-equivalent duty. Gross & Becroft was successful in arguing for the importer, Woolworths Group Ltd, that the imported cider was duty free.

In its decision dated 23 January 2019, the Administrative Appeals Tribunal (


AAT) set aside a decision of the Comptroller-General of Customs in relation to the tariff classification of certain alcoholic apple cider products imported by the Applicant known as ‘Savannah Dry’.

Customs originally classified the goods to heading 2206.00.92 of Chapter 22 of Schedule 3 of the


Customs Tariff Act 1995 (Cth) as other alcoholic beverages with an alcoholic strength between 1.15 and 10% by volume on which Customs assessed a general duty rate of $81.05/L of alcohol. Gross & Becroft represented the Applicant in seeking to set aside this decision and have the goods classified to heading 2206.00.30 as cider beverages as defined by Additional Note 5 and would be duty free. The issue in dispute was whether the cider goods imported by the Applicant fell within the terms of Additional Note 5 to Chapter 22.

Among other matters not in dispute, Additional Note 5 defines ‘cider’ for the purposes of heading 2206.00.30 as a beverage that ‘has not had added to it, at any time, any liquor or substance (other than water or the juice or must of apples or pears) that gives colour or flavour’. The Savannah Dry cider products contained a caramelised apple juice concentrate additive for colour purposes, being a product known as NaturBrown.

Customs argued that NaturBrown was not ‘water or the juice or must of apples’ as the caramelisation of the apple juice to produce the product involved a chemical change that transformed the apple juice into something else. On this basis, Customs argued that the addition of NaturBrown meant the cider products did not fit within the requirements of Additional Note 5.

Representing the Applicant, Gross & Becroft refuted this position and argued that the caramelisation process simply removed some (but not all) of the water content of the apple juice through the addition of heat but did not result in a transformation of the juice. Simply, caramelisation produced concentrated apple juice which is still apple juice and could be reconstituted by the addition of water.

Adopting a common sense approach, the AAT found that NaturBrown is apple juice concentrate that has been subject to intensive oxidisation (i.e. heat treatment) but to which nothing had been added and is ultimately the same thing as the juice concentrate to which it is added. The AAT accepted that caramelisation involves oxidisation, as do other processes in the manufacturing process such as pasteurisation, and that this did not involve a chemical change that transformed the juice into something else. Implicit in this finding is that many products may go through treatment during manufacturing but it does not necessarily change what the product is.

Accordingly, the AAT concluded NaturBrown is the ‘juice or must of apples’ for the purposes of Additional Note 5 and the original classification of the goods should be set aside and the Savannah Dry product be classified to heading 2206.00.30 which is duty free.

Please contact us should you wish to discuss this matter or other international trade related issues in which we may be able to assist.

Ross Becroft & Sam Robertson


24 January 2019