London bar owner says Treasury change ‘misunderstands why people drink wine’

A change to alcohol duty “fundamentally misunderstands why people drink wine”, a London speakeasy owner has said, as he warned nightlife faces an “existential crisis”.

Paul Kohler, the Liberal Democrat MP for Wimbledon, said “every increase in cost makes survival more difficult” for businesses like the one he owns.

The Treasury introduced a temporary “easement” in 2023 which treated all wine between 11.5% and 14.5% alcohol by volume (ABV) as if it were 12.5%.

It ended in February, so the amount of duty applied to wine increases depending on its ABV, which The Wine and Spirit Trade Association (WSTA) said would result in 30 different payable amounts within the range.

When Chancellor Rachel Reeves unveiled her first budget in Government last year, the Treasury said the change would make an 11.5% ABV 250ml glass of wine 5p cheaper – but a 13% ABV 250ml glass would be 8p higher, if the cost is passed on to consumers.

Speaking in the Commons, Treasury minister James Murray said firms had “adapted well to the new system”.

But Mr Kohler – who owns CellarDoor in Covent Garden – had earlier told the Commons that the system is “simply not workable in the context of wine”.

He said: “It fundamentally misunderstands why people drink wine.

“Wine is consumed primarily for taste not strength – the ABV affects the taste profile.

“Compare a light Beaujolais with robust Rioja – it’s all about taste, not about whether it is stronger and someone can get more drunk. That is not how people consume wine.”

The MP also said: “The ABV of wine cannot be predicted with precision before or during the wine-making process.

“The alcohol content’s stable only at the point when the wine goes into the bottle.

“The ABV varies between different years and different vats, and until bottling we do not know the ABV of a particular bottle.

“It therefore creates huge uncertainty about price and profit margins for the industry if there are different rates of duty depending on the specific ABV, down to a gradation of 0.1%.”

Turning to nightlife, Mr Kohler said: “The industry is facing an existential crisis owing to the cost-of-living crisis, rising energy prices, inflation, labour shortages following Brexit, changes to commuting patterns, and more than doubling of business rates.

“Now, another increase in alcohol duties are to be yet another burden.

“Every increase in cost makes survival more difficult as I know myself, and this Finance Bill shows the Government is still not taking the dangers seriously.”

Mr Murray said in response: “The wine easement ended over a month ago and our early indications are that firms, warehouse keepers and HMRC have adapted well to the new system.

“Of course, I and my officials will carefully monitor that situation.”

He added he has been in “routine contact” with people from the wine industry during his time as a minister.