In a written statement from Treasury minister Sajid Javid, he confirmed the Government would be looking at some “less burdensome” options to address alcohol fraud.
The Government launched a consultation on the introduction of beer stamps in March 2012, claiming it would help cut £500m in fraud.
In response the All-Party Parliamentary Beer Group (APPBG), carried out an investigation into the level of alcohol fraud on beer and presented a report to the Government in July. It claimed fiscal stamps were “premature” and called for a range of options including better communication between HM Revenue and Customs and the industry.
In the written statement Javid said: "The responses to the consultation highlighted the potential anti-fraud benefits but also some considerable impacts the proposed measures might have on legitimate alcohol supply chains.
"Compelling evidence was provided on beer fiscal marks to show that, although it could be a useful tool to counter trade in illicit products, the costs of affixing stamps to goods could be significant for the UK brewing industry and particularly for legitimate importers and exporters."
Tightening controls
The Government said it will consider a large number of alternative measures to fight alcohol fraud, including many proposed by the industry.
It said it intends to progress a wider programme of change to policy and enforcement to strengthen the current Tackling Alcohol Fraud strategy. This will include steps to increase collaboration with industry and between enforcement agencies; measures aimed at tightening controls in the existing excise regulatory system; dealing more robustly with those found holding or moving illicit goods, and increasing co-operation with other EU Member States. Many of these were suggested by the APPBG report.
The Government said there was a positive response across all sectors towards the option to register alcohol wholesalers and it wants to consult over a possible registration scheme.
Trade reaction
Brigid Simmonds, BBPA chief executive, said: “This is great news. In setting aside plans for tax stamps on every bottle and can of beer, the Government has listened, and stepped back from a hugely costly and damaging policy that would have hit jobs and growth.
“It again shows that following the beer duty cut in the Budget, the Government recognises the importance of beer and pubs to the UK economy, and the potential for increased beer exports, which have grown substantially in recent years.
“We very much welcome the measures that have been announced today to tackle fraud and we remain committed to working with HMRC to build on their current strategy.”
Keith Bott, chairman of the Society of Independent Brewers (SIBA), also welcomed the move.
“HMRC has recognised that duty fraud affects bottled and canned beer and, therefore, that illicit beer is purchased largely in the off-trade for home consumption. It is therefore another factor contributing to the decline of pub traffic,” he said. “As over 80% of SIBA members’ production is draught beer, it is clearly in our interests to make sure that duty revenue is collected, and thereby avoid this distortion of the market.
“By choosing not to burden the UK’s brewers with the added challenge of duty stamps, the government has again acknowledged that draught beer is a relatively low-alcohol drink, enjoyed for the most part in the sociable, supervised environment of the pub.”