Alcohol Duty: UK Wine Sector

Alison Bennett Excerpts

Tuesday 11th November 2025 Westminster Hall

[Katie Lam (Weald of Kent) (Con)]

I congratulate my hon. Friend the Member for Farnham and Bordon (Gregory Stafford) on giving us an opportunity to discuss this very important topic that affects so many people and businesses in the Weald of Kent, which proudly produces some of the finest wines in the country.

The principle of taxing alcohol by strength may make sense in theory, but wine is an agricultural product. Its strength cannot be engineered to order; instead, it varies naturally with climate and vintage. A system designed for factory production simply does not work for vineyards rooted in the soil. Sadly, our wine businesses have faced steep duty increases, ever more paperwork and, as a result, mounting costs across the board. In the Weald of Kent, small vineyards—often family-run and started from scratch—are grappling not just with higher duties but with higher label costs, greater packaging charges and yet more red tape.

In May, I wrote to the Minister’s predecessor to raise my concerns about the impact of alcohol duty on the wine industry. In his reply, he said that producers below 8.5% ABV could claim draught relief and small producer relief. That is true, but almost no wine sits below 8.5% strength. Might the Minister be able to tell us how many UK wineries actually claimed either relief last year?

[Alison Bennett (Mid Sussex) (LD)]

Like the hon. Lady, as a south-east MP, I have some amazing vineyards in my constituency, such as Bolney Wine Estate and Albourne Estate. They have told me about the challenges of the 8.5% cap that the hon. Lady has so articulately set out. It strikes me, however, that the previous Conservative Government brought in that cap. Does the hon. Lady think that current members of the Conservative party regret that decision from 2022?

[Katie Lam]

It is not for me to speak for them, but it is reasonable to say that the system we have does not work very well. It would not be right to pretend otherwise on behalf of my constituents who have to deal with it every day.

The Minister’s predecessor also said that the new system benefits lower strength wines, including many British wines. Since February, overall rates have risen. Might the Minister be able to tell us what share of English wines are paying less or more duty now than under the previous system? Finally, the previous Minister said that reforms would strengthen the tax base, yet as far as I can see, between April and September, alcohol duty receipts were almost £300 million lower than in the same period last year, despite the rates rise. It would be useful if the Minister could explain that.

Duty on 14.5% ABV wine is now almost half as much more again as it was in August 2023. As my hon. Friend the Member for Farnham and Bordon rightly pointed out, well more than half the shelf price of a bottle of wine is now tax. In France, the equivalent duty is a few euro cents, and in Spain, it is nothing at all. This duty system, combined with the general tax rises in the last Budget, is putting businesses at risk. Could the Minister please rule out any further duty increases in the upcoming Budget? Countless small producers in the Weald of Kent, and about 1,000 independent merchants across England, are already struggling under the weight of new bureaucracy and tax pressures.

Winemaking is not an exact science. As I mentioned, alcohol strength fluctuates from year to year, and small differences can double a producer’s duty bill. Large multi-national producers may be able to absorb that; small family wineries cannot. They cannot dial down their ABV without changing the taste or quality of the product. They cannot dilute wine without destroying it. These are new entrepreneurial businesses built on enormous risk and long-term investment. Many vineyards in the Weald have put everything they have into buying land, planting vines and waiting years before their first sale.

In my constituency, we are proud to host many of Britain’s leading wineries, including Chapel Down, Gusbourne, Balfour, Biddenden, Westwell, Woodchurch and Domaine Evremond—the list goes on. They bring visitors, jobs and pride to the Weald, and it is an utter pleasure to visit them all. We are also home to small start-ups, such as the husband and wife team I met last month in Hamstreet taking a leap of faith into the sector. It if is tough for the big names, it is tougher still for the small ones. Now, they face not just duty increases but rising national insurance costs, higher minimum wages, an end to flexible employment contracts, changes to inheritance tax relief, and packaging fees that penalise glass, which is the only viable material for quality sparkling wine.

When I last raised the broader issue of wine in England, I asked the Minister’s colleague in the Department for Environment, Food and Rural Affairs whether he would support the sector’s call for targeted help, and he said it was a matter for the Treasury. I say to the Minister today, “Please look again.” I know that he did not create the duty framework, but my hon. Friend the Member for Farnham and Bordon is right that we seem to have reached the tipping point at which our taxation system is so complex and onerous that it is collecting less money than a simpler lower-rate system would. It would be great to hear what plans the Minister has to support such an exciting and dynamic industry creating jobs and amazing export opportunities in rural parts of the country such as my home, the Weald of Kent.