Clampdown planned as UK loses millions to wine fraud

UK officials are considering tougher rules for drinks wholesalers as figures suggest the government is losing hundreds of millions of pounds annually via illicit wine sales.

An initial report by the UK customs office, HMRC, has found that illicit wine cost the exchequer at least GBP350m in the country’s 2011-12 financial year, and possibly as much as GBP700m.

As with other forms of alcohol, most of the money is likely being lost via wine that has been ‘smuggled’ into the UK by ‘organised criminal gangs’ without anyone paying duty on it, according a government consultation on the problem set to run until the end of this month.

The consultation, Alcohol Fraud – Next Steps, proposes ‘a requirement that all alcohol wholesalers trading in any type of alcohol whatsoever must register with HMRC’, a spokesperson for the customs body told decanter.com. No central register currently exists.

‘Alcohol fraud is one of the largest tax frauds the UK faces,’ the consultation document says.

Officials have already redoubled efforts to catch illicit alcohol at UK borders. They seized 12.7m litres of alcohol in the UK’s last fiscal year, to the end of March 2013.

The chief executive of the Wine & Spirit Trade Association, Miles Beale, said he would meet with government officials to discuss the latest report’s findings, including the accuracy of the figures and reasons for fraud.

Earlier this month, almost one in five UK adults interviewed by PricewaterhouseCoopers said they ‘sometimes’ bought counterfeit alcohol. The survey follows warnings over the summer about counterfeit wine brands, such as imitations of Jacob’s Creek (pictured) and Blossom Hill, on sale in some regions.

Written by Chris Mercer