Alcohol sales account for 20 percent of the turnover in the buffet car on the Ffestiniog & Welsh Highland Railways.
 
The company said fuel price rises had hit profits and the money spent on board trains had become more important.
 
The Home Office said no decision had been taken after reports that a drinks ban on public transport was proposed as part of a crackdown on binge drinking.
 
It is claimed the proposal is designed to stop passengers being terrorised by drunken yobs on trains and buses, and would also stop travellers having a drink with meals.
 
The Ffestiniog and Welsh Highland Railways, in Porthmadog, serve alcoholic drinks on their regular trains and in their trackside cafe.
 
They also put on special occasion lunches and evening meals, which include a glass of wine.
 
"Having a drink on our trains is something which enhances the pleasure of the journey," said Clare Britton, the company's commercial manager.
 
No Decision
 
"It is not about binge drinking but more about having a small sherry, a liqueur coffee, or a glass of beer whilst enjoying the beautiful scenery of the Snowdonia National Park," she added.
 
The railway said it would be writing to the Heritage Railway Association.
 
"There are many preserved railways who serve alcohol from their buffet cars and for whom the income received is a very valuable part of their total revenue. I would ask the government to carefully consider their actions before it moves further with this proposal," Ms. Britton said.
 
At the weekend, responding to press reports, Defence Secretary John Reid said "it is a proposal for discussion".
 
The Home Office said no decision had been made.
 
Author unknown.