Speaking to the All-Party Parliamentary Beer Group (APPBG) inquiry into beer tax fraud last week, Andy Leggett, deputy director of alcohol, tobacco and gambling taxes for the HMRC, admitted: “It’s always been possible to counterfeit duty stamps.”
His surprising statement follows Government consultation into the proposed introduction of duty stamps on beer bottles, cans and containers below 10 litres. It claims losses from beer duty fraud costs £500m per year and estimates that 5% to 14% of beer consumption is illicit.
APPBG chairman and MP Andrew Griffiths told the PMA: “The whole point of bringing in legislation for duty stamps, which will cost the industry millions of pounds, is to prevent illegal fraud in beer duty.
"Yet to hear the civil servant in charge of the consultation freely admit that it’s already possible to counterfeit duty stamps begs the question, ‘why are we bothering?’ I am concerned that we may just create a new lucrative market in re-packaging and attaching counterfeit stamps.”
Brewing director at the British Beer & Pub Association Andy Tighe added: “This is a real concern for
us, that you can easily counterfeit duty stamps. Of course there are holograms and codes that can prove if a stamp is genuine, but to make something that looks the same [as a duty stamp] is not difficult. Pretty much all stamps can be counterfeited.
“If it’s part of a can design, then the can could potentially be counterfeited. But for imported goods, you have the free-standing stamps which are a real concern [because the stamps are added when the product enters the UK].”
The fear is that beer stamps will increase the production costs for brewers and result in an increase in the cost of beer sold to pubs. Licensees also risk criminal prosecution and a loss of their alcohol licence if they sell packaged beers that don’t meet new regulations aimed at combating duty fraud.