Review

Current debates throughout the wholesale industry – and indeed the total marketplace – are centred on the growth of Tesco and its increasingly dominant position. Wholesalers supplying independent retailers are not the only segment of our industry to voice their concerns. Wholesalers supplying caterers can see the threat too, as the buying power of the giants is translated into low prices for the commodities that smaller catering establishments particularly need.

There is a move to ask the Competition Appeal Tribunal (CAT) to rap the Office of Fair Trading (OFT) over the knuckles for its refusal to ask the Competition Commission to invoke a grocery market review. The Federation of Wholesale Distributors paved the way to the CAT last year when it sought redress against the OFT decision to approve the Tesco acquisition of Adminstore. It was only when Tesco intervened in the action that FWD wisely withdrew under the threat of massive legal costs. It was as a result of this that the CAT laid down a precedent that the threat of such costs should not deter future actions against the OFT. This should protect those seeking any new hearing at the CAT.

The FWD mission is to promote and defend wholesalers’ interests and as we approach the big spirits peak of the year it’s worth reminding readers of our work on Duty Marks. FWD has been involved every step of the way during this process which started two years ago and will culminate on October 1 next year. That is the date from which all bottles of spirits (+30% abv and 35cl upwards) crossing the duty line from a manufacturer or wholesaler into retail must bear the mark.

We obviously applaud any government effort such as this to reduce the high levels of duty fraud that are crippling the legitimate market. However, we had concerns that centred around ensuring a smooth transitional period – whereby wholesalers and their customers would not become liable to prosecution after January 1 2007 if enforcement officers found any unmarked stock on their premises.

This has now been resolved with the Treasury and HM Revenue Customs (HMRC) agreeing that any unmarked stock will be legal as long as proof of its purchase prior to October 2006 can be shown. Wholesalers will have to engage their customers in a sustained educational programme over the coming 12 months to ensure they understand the importance of keeping proper records in this respect. FWD will be working closely with HMRC to ensure the required seminars, leaflets, posters and advertising will be produced.

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