The Federation of Wholesale Distributors is calling for industry co-operation to prevent the illegal sale of duty-unpaid alcohol on the UK market after a National Audit Office report criticised HMRC for failing to engage the supply chain in tackling the issue.
In its report on the effectiveness of HMRC’s Renewed Alcohol strategy, NAO found that there had been “no tangible success” in working with industry to reduce the volume of alcohol legally moved to other EU countries with excise duties unpaid, but then diverted back into the UK for illegal sale.
It concluded that HMRC’s key action to work with businesses to develop practical measures to secure supply chains had not been achieved. “The level of popular UK brands of canned beer supplied to the near continent in duty suspense remains unchanged,” the report said.
FWD has worked closely with NAO over the two years of its investigation. Chief executive James Bielby said: “We welcome NAO’s analysis of the strategy and share its assessment of the lack of success in preventing diversion fraud.
“The illegal sale of alcohol is the responsibility of the entire supply chain
, and we would like to see all stakeholders helping HMRC by providing data on the movement and export of beers, wines and spirits in order to accurately assess the extent of the problem and where and how it occurs.”
“FWD appreciates HMRC’s efforts in recent months to consult industry on potential anti-fraud measures including fiscal marks on beer. We will continue to engage constructively with the Department as it develops its proposals.”
The report says: “The Department believes that the illicit market in alcohol in the UK is driven by strong demand for popular UK brands of bottled and canned beer. Therefore, the volume of alcohol available for fraudulent use in the UK is to a large extent within the control of producers and large buyers of duty suspended goods.”
“There is clearly a need for industry-wide support for any measures that are introduced. One of the options under consideration is the introduction of fiscal marks for beer, which might be as useful a tool in tackling fraud affecting beer duty as it has been for spirits duty.”
HMRC launched its Renewed Alcohol Strategy in April 2009. NAO acknowledged that the new strategy was “more comprehensive” as it covers the duty payable on beer and wines as well as spirits.