Legitimate beer sales have nosedived by as much as 30% since the start of the year after illegal operators started to deliver duty-avoided stock directly to retailers to avoid detection by Customs and the police.
The FWD said members had seen beer volumes plummet by 12% on average between January and May this year at a time when the impulse market was growing.
The FWD has previously intercepted hundreds of flyers and emails offering suspiciously low prices on beer to be collected from industrial estates and back streets, but warned that illegal operators are now delivering directly from unmarked warehouses.
Canned lager sales were hit worst. “Some stores in our area are even prepared to be out of stock of major brand cans while awaiting delivery, because the price differential between legal and illegal supply is so great,” one London wholesaler said.
Bestway, the UK’s second largest C&C operator, said beer can sales had plummeted by 30% in the past four months. “Things are pretty bad. 500ml cans in particular have been affected and in the past four months it’s got a lot worse, which we assume has been all about the build-up to the summer months and a key time for buying canned beer,” a spokesman said.
The lost business flies in the face of growing beer sales in convenience channels. While the total off-trade market has contracted in the last year, impulse beer sales grew by 4% to £1.08bn in the last year as shoppers turned away from big packs in favour of buying single bottles or four-packs in local stores [Britain’s Biggest alcohol Brands, The Grocer/Nielsen, 52 w/e 28 April].
An HMRC spokeswoman said it was tackling fraud along the length of the alcohol supply chain. “HMRC has teams out on the ground to detect, disrupt and seize from those selling illicit goods. Operations are often based on specific intelligence so wholesalers and retailers who have suspicions about anyone selling alcohol are urged to contact the Customs Hotline,” she said.
Duty fraud takes many forms. In some cases, fraudsters import alcohol from a bonded warehouse in Continental Europe and claim it is destined for a UK warehouse where duty will be paid when it is sold, but then illegally divert the alcohol and sell it on.
They may also reverse the fraud by sending empty trucks to France, claiming they are loaded with beer to be sold on the Continent where duty will be paid, but in reality keeping the alcohol in the UK and selling it on with no tax added. FWD said duty stamps for beer, being mulled by HMRC, would address this.
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