A remarkable improvement has been achieved in reducing duty fraud, according to speakers at the FWD’s Drinksummit conference last week.
Jim Brown, trading director of Landmark Wholesale, reported on an initiative by Coors that is now being adopted by other brewers, where they would only deliver to a customers’ primary business location.
Brown said soon after Coors implemented the policy the “dodgy sheds” ran out of Carling. He added: “Our members are reporting staggering increases in sales at sensible profitable prices. Sales have not migrated to other grey market brands and we have resumed a strong and strategic relationship with Coors.”
Deprived of the biggest SKU, the fraudsters turned to the second largest, Stella Artois, but Brown said discussions with InBev suggested they would “tackle the problem quickly and effectively”.
Brown also revealed Anheuser-Burch and Miller Brands were following Coors’ example, and Diageo was expected to make a move very soon.
Vintners were also looking to combat duty evasion, said Brown, and every major vintner was believed to be planning initiatives by the end of June.
Duty stamps on spirits were also working well, he reported, with some suppliers reporting sales uplifts of 30%-40% as a result of their introduction.
Alan Powell, a duty consultant, told the conference HM Revenue Customs were also applying a new policy announced in the budget very aggressively.
The new powers mean they will refuse to pay a claim for drawback until they are fully satisfied it is genuine, and appeals could take years to settle.
He said the same tactics had been used against VAT carousel fraudstars and most had now stopped trading or were bankrupt. He said claimants had complained about Customs unfair tactics, but added: The point is Customs have realised they have the fraudsters’ money, and while they do it is a prisoner and going nowhere.”
Brown paid tribute to the work of the FWD in lobbying government and said it could take credit for the change in policy on draw back.