A new registration scheme for alcohol wholesalers is on its way to being enshrined in law after the government published draft legislation overview documents for the Finance Bill 2015 this week.

The Federation of Wholesale Distributors, which originally proposed the Alcohol wholesaler Registration Scheme (AWRS), said it would be a massive boost for legitimate traders and taxpayers.

Under the scheme, wholesalers that have not applied for registration will be liable to a penalty from January 2016. retailers will need to demonstrate they have bought alcohol products from a registered wholesaler from April 2017.

The scheme will require any business trading alcohol in wholesale volumes to undergo stringent tests to ensure they are trading within the law.

The FWD said it was excellent news for legitimate wholesalers as well as for the Treasury, which was currently losing £1.3bn a year to alcohol duty fraud. “This is a major step towards identifying rogue operators and restoring control of alcohol distribution to legitimate wholesalers,” said FWD chief executive James Bielby.

“We have worked hard to bring this issue to the government’s attention, and although compliance with the scheme will place an operational burden on our members, it is a short-term pain for a long-term gain.”

The FWD would keep members up to date on the requirements of the scheme over the next months to ensure standards were met within the timeframe, he added.