n Plans for a duty paid mark now only apply to spirits. And Customssay they are winning the war on smuggling. Simon Mowbray and Tim Palmer report The dispute over whether Britain should get a Duty Paid mark on alcohol advanced this week as Customs and Excise declared its true intentions. Customs bosses coyly posted a state-of-the-nation report about smuggling on their web site on Wednesday, revealing their proposals for the new mark. Plans for the across-the-board mark on alcohol were first revealed exclusively in The Grocer at the beginning of September, but pressure from Britain's brewers now appears to have reaped the reward of a reprieve. In its report, titled Tackling Indirect Tax Fraud, C&E now suggests a duty mark similar to that already posted on tobacco will not be needed on beer or wine after all. However, spirits manufacturers and importers look unlikely to escape the plans and immediately reacted with anger, even though they will get the chance to air their opposition during a consultation period. Scotch Whisky Association spokesman Campbell Evans said his members would lobby hard. "This will hit our costs and reduce our competitive edge," he said, claiming the mark would create huge problems on bottling lines and cripple smaller producers. "We will keep the pressure on between now and the Budget and we are asking for an early meeting with the Treasury." Justifying the decision to concentrate efforts on stamping out spirits smuggling, the C&E report enthuses that the "smuggling of beer has almost been eliminated" and that losses from smuggling of wine were now "relatively small" following a success-ful first year of a new multimillion pound strategy to clamp down on cross-Channel contraband. The total amount of lost revenue from cross-Channel smuggling for all tobacco and alcohol products, adds the report, fell 76% in the last year "massively exceeding the target of a 10% reduction". However, the level of spirits fraud is still a major problem and amounted to the equivalent of 15% of the UK market in revenue losses during 1999-2000. Here the government is committed to further action which will be "necessary to reduce revenue losses from spirits fraud and to reduce the competitive disadvantage suffered by legitimate traders". It adds that if the tax stamping system is adopted on spirits, there will be new sanctions for those found dealing in un-stamped goods, likely to be similar to those already imposed on retailers who sell cigarettes without the appropriate mark. As The Grocer went to press, the proposals met a mixed reaction from the trade. Alan Toft, director general of the Federation of Wholesale Distributors, said he would welcome the new stamp as long as it did not cost his members a penny. "If a duty mark on spirits can be implemented without cost to wholesalers, as was the case for tobacco, then we will welcome it," said Toft. He said there was already support for punishing retailers who dealt in illegally imported liquor and added: "They are as bad as the criminals who organise the fraud." Wine and Spirit Association director Quentin Rappoport said the wine industry would welcome being left out of C&E's plans but added: "This added level of bureaucracy could kill off the little (spirits) producers and consumers would suffer because their choices would be restricted." He said it was not clear how the mark would work for products coming into the UK or whether duty paid' labels could be made counterfeit proof. However, Britain's brewers were delighted to be let off the hook. British Beer and Pubs Association chief executive Rob Hayward said: "There are a lot of small companies trying to export and if they had been required to keep duty stamped product separate it would have caused large additional costs. Implementing it would also have been chaotic." Meanwhile, C&E said officers had held the market share of smuggled cigarettes in 2000-2001 to 21%, thanks to an ongoing £209m cash injection from government which will have created 955 frontline staff by 2003 and has already provided a network of crime-busting x-ray scanners. Imperial Tobacco was among the first to welcome C&E's latest figures on tobacco smuggling but warned that Britain was still lagging way behind its European neighbours on stamping out con-traband. A spokesman said: "The only way to fully address the issue is by freezing or reducing UK cigarette taxation." {{NEWS }}