Wholesalers are warning that duty fraud on beer is spiralling “out of control” after new HMRC figures revealed one in 10 beers sold in shops is now supplied illegally.

The figures, released this week, revealed the market share for non-UK duty paid beer jumped from 9% to 10% during 2011 - resulting in duty and VAT losses incurred from the fraudulent trade increasing 10% from £500m to £550m.

“These figures confirm that this illegal trade is out of control,” said FWD chief executive James Bielby. “In cities and towns all over the country you will find illicit operators making a fortune selling non-duty paid beer and taking sales away from the legitimate wholesalers who support thousands of small businesses in those areas.

“The growing revenue loss figures, and the tiny number of successful prosecutions, show current efforts to catch these criminals are ineffective. That is why we are leading the call for a new approach that cuts off criminals’ supply line.”

In July, the FWD urged the government to go ahead with proposals to stamp out duty fraud by introducing fiscal marks on beer - a position backed by the ACS.

However, the stamps have been slammed by the British Beer & Pub Association, which believes they would be a financial burden on the industry. Instead, BBPA chief executive Brigid Simmonds issued a 10-point plan she claimed would tackle duty fraud and eliminate the need for beer stamps or supply chain legislation.

Last month, The Grocer revealed that legitimate beer sales had fallen by 30% this year, after crooks started advertising illegal booze on flyers and delivering directly to retailers to evade Customs and the police. Bestway, the UK’s second-largest C&C operator, said canned beer sales had been hit hardest.

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