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Alcohol fraud costs the British public £600 million every year
A guest blog from the Wine and Spirit Trade Association explains this cost and what can be done about it
Illicit alcohol: how it affects you and your community
The Wine and Spirit Trade Association (WSTA) represents over 300 companies in the UK’s alcohol supply chain. Sadly fraud will affect every one of these companies in one way or another.The complex nature of how illicit alcohol ends up on the market means that the police can’t tackle this problem alone. However there are things that you could be doing to help catch the crooks and protect businesses, jobs and communities.
This blog focuses on frauds relating particularly to beers, wines and spirits.
Duty fraud occurs where criminals sell alcohol without having paid the UK’s excise duty.
Currently, our industry pays about £12bn per year in excise duty, which goes towards paying for essential public services, like hospitals and schools.
The best estimate for duty fraud is that it costs about £600m per year across wines, beers and spirits. This is money that should be going towards boosting public services and not to criminal gangs. The negative impacts reach much further than taking money away from the taxman:
Currently, our industry pays about £12bn per year in excise duty, which goes towards paying for essential public services, like hospitals and schools.
The best estimate for duty fraud is that it costs about £600m per year across wines, beers and spirits. This is money that should be going towards boosting public services and not to criminal gangs. The negative impacts reach much further than taking money away from the taxman:
- It puts money into the pockets of criminals, who use it to fund other activity such as people trafficking;
- It directly damages your business in the communities it operates, by siphoning customers away;
- More widely, it damages the reputation of the industry as a whole by associating it with criminal activity.
- At its most basic, if you’re employed in the alcohol industry, then duty fraud is a threat to your job and personal financial security.
The good news is that there is something we can do about it. Have you experienced any or all of the following?
This simple service allows you to report these crimes 100% anonymously. Even if you opt in to the two-way option online you remain anonymous.
You can choose to give your details when reporting – these will then be treated confidentially.
Your information is handled by trained call agents and will then be sent to the Intellectual Property Office.
It may be that you can provide the vital piece of intelligence in a major investigation.
You can also make sure that your business is aware of the threat, so it can educate your business, community and retail customers through its normal publicity channels.
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- Fliers being put around in your area advertising alcohol at a price you know is too low;
- Previously reliable customers reducing or terminating their orders because they can get cheaper products elsewhere;
- Unfamiliar brands appearing in outlets you service;
- Suspicious, unmarked vans visibly selling alcohol in car parks, industrial estates etc?
This simple service allows you to report these crimes 100% anonymously. Even if you opt in to the two-way option online you remain anonymous.
You can choose to give your details when reporting – these will then be treated confidentially.
Your information is handled by trained call agents and will then be sent to the Intellectual Property Office.
It may be that you can provide the vital piece of intelligence in a major investigation.
You can also make sure that your business is aware of the threat, so it can educate your business, community and retail customers through its normal publicity channels.
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The fake alcohol menace is another level of threat altogether. It may be inferior liquid posing as a premium product. More worryingly, it may not be fit for human consumption at all and contain methanol or other harmful substances. At worst, this could lead to death for a consumer - 19 people died in Malaysia last year from fake alcohol.
Signs that something might be fake include:
Signs that something might be fake include:
- an unfeasibly low price;
- an unfamiliar brand that imitates better-known ones;
- poor quality labelling, misaligned, with smudged ink, and elements missing, such as the name and address of the responsible food business operator;
- the product being sold through unusual supply chains, as with duty fraud;
- reports that the product tasted “off” or an increase in customer complaints about products not meeting expectations.
How the Wine and Spirit industry can stop the sale of fake alcohol
If you think there’s an immediate risk to health then you should call the police on 999.Your business may also need to consider its product recall processes, if your branding has been counterfeited.
All other information or suspicions can be reported to the Alcohol Fraud Reporting Line on 0800 234 6388 or via the online form at www.alcoholfraudline.com, 100% anonymously.
Conclusion
Illicit alcohol and duty fraud are a direct threat to the reputation of the industry and, in some cases, consumer health.You can do something about that, by being alert to the presence of illicit products and fraud.
Drinkaware and The Trading Standards Institute, often refer to “the 4 Ps”:
- Place
- Price
- Packaging
- Product
Combined with industry knowledge, well-informed observers can contribute to tackling illicit alcohol and duty fraud.
By working with the independent charity Crimestoppers, the Wine and Spirit Trade Association provides the Alcohol Fraud Reporting Line for use by those within the industry as well as members of the public who may have information.
Know something? Call us on 0800 234 6388 or go to the online form at www.alcoholfraudline.com 100% anonymously.
Author: David Richardson
David is the Regulatory and Commercial Affairs Director of the Wine and Spirit Trade Association. He spent 16 years as a prosecutor, mainly on complex fraud and smuggling cases.
He advises WSTA members on counter-fraud and business resilience.
