FWD welcomes consultation on duty fraud

New measures proposed in the Budget to tackle duty fraud on alcohol will help stamp out the growing illegal trade which damages legitimate wholesalers’ businesses, according to the FWD.

The measures, including the introduction of duty stamps on beer and a registration scheme for wholesalers, are proposed in a consultation announced by the Chancellor and will prevent illicit sales of beer and wine. FWD said they were welcomed by legitimate wholesale businesses, who have been undercut by criminal organisations trading non-duty paid alcohol.

The treasury estimates it lost £500m in avoided duty revenue on beer alone in 2009/10, a 20% increase over the previous year, while food and drink wholesalers have seen beer and wine sales suffer as illegal traders undercut their prices with floods of non-duty-paid products which are bought for export but then diverted to the UK market.

FWD chief executive James Bielby said: “The announcement is good news not only for taxpayers who are losing out as criminals evade paying duty on alcohol, but also for legitimate wholesale and retail businesses who are already struggling in a difficult economic environment.

“As duty continues to rise, the illicit market will become even more attractive to criminals, and that’s why FWD has pushed hard over the last 18 months for this consultation. We are delighted that the Government has heard the message that it has to take steps to prevent loss if it intends to increase duty.”

FWD has put forward recommendations to the Treasury including the adoption of a registration scheme for wholesalers and the introduction of duty stamps on beer bottles and cans, similar to those on spirits bottles which have seen the level of duty fraud in the category fall since their introduction in 2006.

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