The operators were dubbed “rogue traders” by Rodney Hunt, the chairman of the Federation of Wholesale Distributors, in a keynote speech at its annual Drinksummit last month.
Industry insiders have
described them as sizeable criminal operations that are also a convenient means of laundering money.
In many cases, their turnover is rumoured to rival that of legitimate operators. But because police and Customs struggle to build a case against them, their success misleads retailers into believing they are legal businesses. However, wholesalers fear to inform the authorities of their activities for fear of retribution. One wholesaler who The Grocer spoke to this week refused to reveal details because he was afraid of being “knee-capped”.
“The situation has become as massive as it ever was and it’s having a very substantial effect on our business,” said another wholesaler. “We’re caught between the multiples and this illegal competition,” he added.
Nicky Edden, director of Vitality Group, said he knew of fellow wholesalers who had suffered significant losses due to such operators. And he said his company had suffered as well.
“I’ve come across companies being set up using other companies’ details.
“They have assumed the identity of legitimate businesses, then they have ripped us and others off for hundreds of thousands of pounds.”