Instrument popular with wine around (8)
I believe the answer is:
clarinet
'instrument' is the definition.
(clarinet is a kind of instrument)
'popular with wine around' is the wordplay.
'popular with' becomes 'in' (I can't justify this - if you can you should believe this answer much more).
'wine' becomes 'claret' (claret is a kind of wine).
'around' indicates putting letters inside.
'in' going into 'claret' is 'CLARINET'.
(Other definitions for clarinet that I've seen before include "Woodwind instrument played by Artie Shaw and Benny Goodman" , "Single-reed straight-tubed instrument" , "Wind instrument made from Clare tin" , "It's for playing" , "Single reed woodwind instrument" .)