Angry wholesalers are demanding the government takes drastic action to combat duty fraud and have released figures to show the "devastating" impact the worsening problem is having on their businesses.
The Federation of Wholesale Distributors held a crisis meeting in which some of the biggest names in wholesale and brewing called on the HMRC to take more action to resolve the problem.
FWD CEO James Bielby has been frustrated by the HMRC's response to the problem so far.
"Duty fraud is taking place on an eye-watering scale and having a devastating effect on wholesalers," he told The Grocer.
"The HMRC response has been pretty weak so far. We are saying you need to act now. We have agreed to meet again in three months, but I fear nothing will have changed."
An Early Day Motion was tabled in parliament this week by Labour MP Angela Smith, calling on the HMRC to do more to tackle the problem.
Duty fraud has got steadily more prolific over the past year, as consumers buy booze from dodgy dealers who have swerved duty and VAT and often sell it cheaper than even factory gate prices, wholesalers have claimed.
Bestway MD Younus Sheikh claimed alcohol sales had fallen 40% over the past two years.
Booker added that sales of super-strength beer were down 24% and premium beer sales were down 23% so far this financial year compared with the same period last year.
Buying group Landmark Wholesale claimed sales of beer were down 24% in the first 11 months of 2009 compared with the same period the year before. Wine sales were down 8%.
Peter Blakemore, MD of AF Blakemore & Son, said alcohol sales at his cash & carry business were down 13.8% this financial year.
Another wholesaler, who asked not to be named, said sales of his top 10 wine brands were down 41% in the six months to the end of December compared with the same period the previous year.
HMRC bosses including senior business manager Peter Latham insisted they were taking the problem seriously, were confiscating more alcohol and were holding "Blitz Operations" in which they swooped on areas and confiscated defrauded products. Regional teams had been set up and were currently in training, they added.
The introduction of tax stamps had helped reduce fraud on spirits, they said, but admitted they had no accurate way of measuring wine and beer fraud. The withdrawal of the warehousing for export scheme had been less effective than hoped, they added.
HMRC, brewers and wholesalers agreed at the meeting that they would examine ways of working together to eliminate fraud.
Stuart MacFarlane, president of AB InBev UK, who attended the meeting, said he was "encouraged" by the progress made.
Read more
Saturday Essay: We need more action on alcohol duty fraud (19 December 2009)
MacFarlane urges duty fraud action (21 November 2009)
The Federation of Wholesale Distributors held a crisis meeting in which some of the biggest names in wholesale and brewing called on the HMRC to take more action to resolve the problem.
FWD CEO James Bielby has been frustrated by the HMRC's response to the problem so far.
"Duty fraud is taking place on an eye-watering scale and having a devastating effect on wholesalers," he told The Grocer.
"The HMRC response has been pretty weak so far. We are saying you need to act now. We have agreed to meet again in three months, but I fear nothing will have changed."
An Early Day Motion was tabled in parliament this week by Labour MP Angela Smith, calling on the HMRC to do more to tackle the problem.
Duty fraud has got steadily more prolific over the past year, as consumers buy booze from dodgy dealers who have swerved duty and VAT and often sell it cheaper than even factory gate prices, wholesalers have claimed.
Bestway MD Younus Sheikh claimed alcohol sales had fallen 40% over the past two years.
Booker added that sales of super-strength beer were down 24% and premium beer sales were down 23% so far this financial year compared with the same period last year.
Buying group Landmark Wholesale claimed sales of beer were down 24% in the first 11 months of 2009 compared with the same period the year before. Wine sales were down 8%.
Peter Blakemore, MD of AF Blakemore & Son, said alcohol sales at his cash & carry business were down 13.8% this financial year.
Another wholesaler, who asked not to be named, said sales of his top 10 wine brands were down 41% in the six months to the end of December compared with the same period the previous year.
HMRC bosses including senior business manager Peter Latham insisted they were taking the problem seriously, were confiscating more alcohol and were holding "Blitz Operations" in which they swooped on areas and confiscated defrauded products. Regional teams had been set up and were currently in training, they added.
The introduction of tax stamps had helped reduce fraud on spirits, they said, but admitted they had no accurate way of measuring wine and beer fraud. The withdrawal of the warehousing for export scheme had been less effective than hoped, they added.
HMRC, brewers and wholesalers agreed at the meeting that they would examine ways of working together to eliminate fraud.
Stuart MacFarlane, president of AB InBev UK, who attended the meeting, said he was "encouraged" by the progress made.
Read more
Saturday Essay: We need more action on alcohol duty fraud (19 December 2009)
MacFarlane urges duty fraud action (21 November 2009)
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