Behind the Headlines

Trading standards - a regional perspective

At a national level the approach to dealing with smuggled, fraudulent and counterfeit vodka revolves around the amount of money lost through tax evasion.

From a regional perspective, counterfeit vodka is a problem because of the consumer related issues that have emerged from it. Instead of focusing on fiscal issues, regional trading standards teams are concerned with health and safety.

Trading standards are responsible for protecting the interests of honest business and consumers.

If someone buys a bottle of vodka they suspect to be counterfeit, trading standards will normally be the first point of contact. Many of the cases that have been reported on have emerged from trading standards prosecution.

Once someone suspects that they believe their vodka to be counterfeit, trading standards will investigate and bring a prosecution where necessary.

The case will be brought against the retailer of the product rather than the people who are making and distributing counterfeit vodka.

A recent example of this level of enforcement took place in Islington earlier this year.

In January, four off-licences were fined over £6,000 between them for the sale of counterfeit vodka, after someone who bought the illegal product complained to the council.

Brian Gohery, one of the trading standards officers involved in the case explained that since the prosecution of the off-licences the council have actively gone out to shops and created a presence.

He said: “Information was sent out to all the local shops and trading standards will be visiting independent off-licences.

“Many traders were pleased to trading standards, as they have been offered the goods, but refused them.”

The alarm will often be raised when someone has bought a bottle of vodka which doesn’t smell or taste right. It is only after someone has bought a counterfeit product that they will be able to tell whether the vodka is counterfeit or not.

Balihar Khalsa

Government renewal of alcohol fraud strategy

Alcohol fraud continues to be a major problem for HM Revenue and Customs (HMRC) despite a four year strategy aimed at reducing the activity.

Since 2005 HMRC have worked with the alcohol industry in a bid to reduce the amount of money lost to the taxpayer through tax avoidance carried out by organised criminal gangs.

A renewed strategy called, ‘Tackling Alcohol Fraud’, was announced last month in the budget along with a range of measures designed to prevent tax avoidance.

It is estimated that £250m is lost in taxes annually through the sale of spirits that have not had the correct amount of tax paid on them. VAT and excise duty are the two levies payable before the sale of spirits on the retail market.

The renewal of the strategy highlights government awareness of criminal gangs and organised fraudsters’ successful attempts to enter the alcohol industry.

HMRC and the UK Border Control Agency will continue to work together, to tackle the problem and focus on three main themes: changing the law, working with honest business and strengthening operational responses to alcohol fraud.

A new anti-fraud team has been established which includes a national network of detectives capable of providing a quick response to risky alcohol consignments 24/7.

Not all of the new measures will be implemented immediately. Consultations into the impact that changes in the law will have on legitimate industry will be held in the near future.

The Federation of Wholesale Distributors (FWD) has welcomed the move after lobbying the government.

John Murphy, FWD director general said: “This is really good news and fulfils our best hopes for strong HMRC action to crack down on duty fraud on alcohol.

“We alerted the authorities to the escalating scale of the problem early last summer, and singled out abuse of the duty drawback facility as a prime mover of the fraud at that time.”

Balihar Khalsa