Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if his Department will review the 8.5% ABV cap for Small Producer Relief as part of the ongoing three-year evaluation of the alcohol excise duty system.

The Government has conducted an evaluation of the 2023 Alcohol Duty reforms, in line with the commitment to do so three years on from their implementation. At Budget 2026, following the collection and review of evidence, HMRC and HM Treasury published a report on its findings. This report is available on the gov.uk website.

The Alcohol Duty evaluation report shows that the reforms have encouraged producers to innovate, reformulate, and meet the demand for lower-strength products.

Alongside the introduction of the 2023 reforms, a temporary easement was put in place for wine importers and producers to help manage the transition to the new method of calculating the duty on their products. The impact of the wine easement was not reviewed as part of the Alcohol Duty evaluation as it was a temporary measure.

The 8.5% ABV limit ensures that Small Producers Relief is targeted at lower-strength products. This is line with the principle underpinning the 2023 Alcohol Duty reforms that stronger alcoholic products should pay more duty.