Cash & carries have revealed that sales of leading beer brands were down by up to 90% in the run up to Christmas - because of duty fraud.
Carling and Foster's were the brands most affected by retailers buying cheap beer from duty fraudsters, with sales down as much as 90% at Parfetts and 60% at Bestway in some weeks.
Bestway claimed its total beer sales had slumped 25% over the second half of the year, while Parfetts said branded sales were down between 10% and 20% in December.
Wholesalers have been struggling to compete with multiples on price, particularly around Christmas. This had prompted many retailers to use less reputable suppliers selling for even less than the multiples, wholesalers claimed.
"The problem has been coming back since the summer and was bad throughout the lead-up to Christmas," said John Murphy, director general of the Federation of Wholesale Distributors.
Among the methods used by the fraudsters is failing to pay duty on imported beer and duty drawback - which allows them to claim rebates on duty if they say they are selling the alcohol abroad.
Parfetts MD Steve Parfett said that some of his customers had admitted buying their beer from suppliers who had not paid duty. "Christmas was surprisingly good in most areas but beer was massively affected by duty fraud. It would have been an extremely good Christmas otherwise," he said. "This is a major issue for us."
Beer accounted for about a sixth of the business, he said, describing the problem as "potentially business-threatening".
Bestway MD Younus Sheikh said that the duty fraudsters had also taken the shine off what would otherwise have been a strong Christmas trading period for Bestway.
"It is very frustrating for us because we are an honest business and we're losing out," he said. "Beer is a very important part of our business. We're calling on Customs to take this problem seriously."
Carling and Foster's were the brands most affected by retailers buying cheap beer from duty fraudsters, with sales down as much as 90% at Parfetts and 60% at Bestway in some weeks.
Bestway claimed its total beer sales had slumped 25% over the second half of the year, while Parfetts said branded sales were down between 10% and 20% in December.
Wholesalers have been struggling to compete with multiples on price, particularly around Christmas. This had prompted many retailers to use less reputable suppliers selling for even less than the multiples, wholesalers claimed.
"The problem has been coming back since the summer and was bad throughout the lead-up to Christmas," said John Murphy, director general of the Federation of Wholesale Distributors.
Among the methods used by the fraudsters is failing to pay duty on imported beer and duty drawback - which allows them to claim rebates on duty if they say they are selling the alcohol abroad.
Parfetts MD Steve Parfett said that some of his customers had admitted buying their beer from suppliers who had not paid duty. "Christmas was surprisingly good in most areas but beer was massively affected by duty fraud. It would have been an extremely good Christmas otherwise," he said. "This is a major issue for us."
Beer accounted for about a sixth of the business, he said, describing the problem as "potentially business-threatening".
Bestway MD Younus Sheikh said that the duty fraudsters had also taken the shine off what would otherwise have been a strong Christmas trading period for Bestway.
"It is very frustrating for us because we are an honest business and we're losing out," he said. "Beer is a very important part of our business. We're calling on Customs to take this problem seriously."
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