Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment she has made of the potential impact of removing the ABV limit of 8.5% from Small Producer Relief on businesses.

Following public consultation, a new strength-based duty structure for alcohol products was introduced in August 2023.

As part of these reforms, Small Producer Relief (SPR) replaced and extended the previous Small Brewers Relief. SPR supports SMEs and new entrants by permitting smaller producers who make 4,500 hectolitres or less of alcohol per year to pay reduced duty rates on all products below 8.5 per cent ABV.

The design of SPR balances the needs of businesses against the Government’s public health objectives. The 8.5% ABV limit aligns with the duty thresholds set within the wider duty system and ensures that the Government does not provide a lower rate of duty on higher strength alcohol products, even if they are produced by small producers.

This issue was considered in detail as part of the Alcohol Duty Review consultation, the response to which is available here:

https://www.gov.uk/government/consultations/the-new-alcohol-duty-system-consultation

HMRC plans to evaluate the new rates and structures three years after the changes took effect on 1 August 2023.  This will allow time for HMRC to gather a broad range of data. The Government welcomes evidence on the impact of the changes so far.