Alcohol Duty: UK Wine Sector

Charlie Maynard Excerpts

Tuesday 11th November 2025 Westminster Hall

[Charlie Maynard (Witney) (LD)]

It is a pleasure to serve under your chairmanship, Mr Turner. I thank the hon. Member for Farnham and Bordon (Gregory Stafford) for bringing us this very important debate; it is much appreciated.

The overall logic of more alcohol resulting in more tax makes sense, and the taxation of wine needs to be stable, fair and workable. That principle has to work in practice, and we are completely failing on that in the current system. We really need to fix that as soon as possible.

To recap, before August 2023, in line with EU regulations, wine duty was predominantly charged according to volume, rather than how much alcohol the product contained. In August 2023, through the Finance (No. 2) Act 2023, a new duty system was introduced that required duty to be paid on all products according to strength. On 31 January 2025, wines between 11.5% ABV and 14.5% ABV were taxed as if their strength were 12.5%, but that measure was withdrawn on 1 February 2025. Therefore, 85% of all wine sold in the UK is subject to the same rate of duty.

Under the new system, that has been replaced by 30 different rates based on ABV at 0.1% increments. That is extraordinary. It would make sense if we were talking about vodka, which is distilled, or beer, which is brewed, as the producer is able to perfectly and precisely determine how much alcohol is in those products. It makes absolutely no sense for an agricultural product like wine; a bottle of wine may have more or less alcohol in it from one season to the next. Dealing with the microscopic increments puts domestic and foreign producers and retailers in this country in real trouble, because every single one of those bottles needs to be measured and calibrated, and priced and taxed accordingly. The administrative burden of that is absolutely horrendous.

I hear that from Oli Gauntlett, the head of Eynsham Cellars and a loyal constituent, and from the Oxford Wine Company, which is a wonderful wine company that serves Oxfordshire. It has had enormous admin trouble dealing with this issue. I also hear it from Majestic Wine, which has a shop in Witney. The single best reason to change this is, as so many people have said already, that it is not working: we have £300 million less excise duty as a result. I cannot think of a better argument to tickle the Treasury into a sensible decision.

[Caroline Voaden (South Devon) (LD)]

Does my hon. Friend agree that this policy directly hits the small independent wine importers, such as The Wine Loft in Brixham? It sells many different kinds of wine, but it does not have the power of Sainsbury’s or Majestic. It does not have a whole department to manage it and bring in large quantities of the same wine.

[Charlie Maynard]

I agree 100%. That is a great illustration of just how painful and unnecessary it is. This is not benefiting anyone, not even His Majesty’s Revenue and Customs. The Budget is very soon and, bluntly—I do not want to stick the knife too much into my Conservative colleagues—I think the previous Government’s tax reforms were, overall, quite sensible in levying more tax on higher amounts of alcohol, but that is obviously mad when it comes to wine. I am an equal-opportunities knife sticker, so why did Labour follow a mad Tory policy? It is a bit like, why are they following a mad hard Brexit? Pull out, blame the Tories and then change the policy back to something sensible. They could raise more tax and put UK growers and UK retailers back on their feet.

--- Later in debate ---

[Dan Tomlinson]

The hon. Gentleman might think that some of the OBR’s assumptions are wrong. I encourage Members, if they have evidence, facts or figures that they want to put to the OBR on the elasticities—as I believe it is called when a tax rate is changed and has an impact on consumption—to send them in. The Government are confident in the OBR’s independence, but I will always want to ensure that we are putting forward accurate costings. In this instance, I believe that the OBR is in the right place when it comes to the elasticities, but Members should feel free to send in their own representations.

It is worth noting that freezing alcohol duty this year, if inflation was around 4%, would be equivalent to a 3.85% duty cut. Using HMRC’s published ready reckoner, this would cost the Exchequer roughly £440 million a year. It is right, therefore, that any decision on alcohol duty weighs the impact on overall revenues carefully. That is what I am confident that the Chancellor will do when she makes a decision in the Budget in just a few weeks.

I will try to run through some of the points made by Members in this debate. The hon. Members for Bridgwater, for Weald of Kent and for Farnham and Bordon, and the Opposition spokesperson, the hon. Member for North West Norfolk (James Wild), raised the issue of small producer relief for wine. That question was considered in detail as part of the previous Government’s review into alcohol duty, and as I have said, we will look to review it three years after the implementation that took place on 1 August 2023. We want to gather data and really look at the impact of the reforms. If Members want to come forward with proposals for change, then they should do so.

[Charlie Maynard]

Will the Minister give way?

[Dan Tomlinson]

Of course. I was looking forward to my first intervention, and will happily give way.

[Charlie Maynard]

I am just going to make a plea. HMRC is losing nearly £1 billion a year, which is incredibly bad news, and there are massive frictions and admin costs on business. Why would we not just go back to the easement? We can stand looking at this massive problem, or we can face facts and deal with it—and actually get money for the Exchequer.