Say “yes” to registration to beat booze black market

The Federation of Wholesale Distributors (FWD) is calling on wholesalers around the UK to back its bid for a registration scheme to beat black market booze operators.

In an impassioned plea to the industry this week, the Federation said a registration scheme for alcohol wholesalers would be “a burden worth bearing”, as it would help law-abiding businesses reclaim sales which are currently being lost to alcohol duty fraudsters.

The FWD’s proposal for mandatory registration, which will help prevent a £1bn-a-year duty revenue loss to the taxpayer and stop criminals trading in illicit beers, wines and spirits has been the subject of a Government consultation which closed this month.

“The cost of meeting the registration requirements will be heavily outweighed by increased sales as duty cheats are kicked out of the market,” the FWD told Wholesale News.

And in its submission Alcohol Fraud: Next Steps, the Federation stressed: “If wholesalers stocking duty-paid alcohol were required to be registered by HMRC, and meet additional conditions after registration, it would frustrate or eliminate the distribution of diverted, non-duty goods at the end of the supply chain.”

FWD members have worked closely with HMRC and other stakeholders to ensure that the scheme will not place an undue burden on smaller wholesalers who trade within the law.  Under the proposal, any wholesaler who is found guilty of tax fraud, or handling excise goods upon which duty has not been paid, would have their registration revoked by HMRC and could face an additional financial penalty.

The scheme would also place a requirement on retailers to check that they are buying from a registered source, and suggest that those which are unable to demonstrate this should be referred to the local licensing authorities for a licence review. 

Landmark Wholesale managing director Martin Williams has already thrown his weight behind the campaign. The head of the 37-member wholesale buying group told Wholesale News: “We are 100% supportive of the wholesaler registration process and support everything our colleagues at the FWD is trying to achieve for us.

“If it works as envisaged, it will stop the duty fraud market and allow legitimate wholesalers to trade competitively with each other.”

Simon Hannah, managing director of JW Filshill, which delivers to 1600 customers in Scotland and the North of England, said curbs on the illegal traders were long overdue. “Throughout our distribution area there are back-street operators who are selling beer and wine at prices we struggle to match,” he said.

“We don’t believe they can be doing this if they are paying UK duty on the products they sell, but because of the lack of action against them, customers don’t realise they are getting involved in an illegal supply chain and risking their licence as a result. A thorough registration regime which involves inspection of these businesses and where they source their stock is exactly what is needed to flush the cowboys out of the market, and reassure retailers that they are buying legitimately.”

FWD chief executive James Bielby added: “We have told HMRC that the key to success is a robust scheme which does not overburden legitimate wholesalers with costs, but is thorough enough to exclude the fraudsters, and rigorously enforced to monitor the activity of registered companies. We have worked hard to come up with a solution which suits all parties and I’m confident that the proposal before government will help it regain the millions of pounds of revenue currently lost to the illicit trade.”

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