Duty fraud campaign gathers momentum

02 April, 2010

The frontline fight to stamp out duty fraud is apparently about to get a lot tougher, which is some very welcome news for the trade.

A week after the Chancellor clobbered the industry with more punitive duty hikes, the government has outlined new measures to address the issue of duty evasion and claw back some of the cash that should be directed to its coffers.

Despite the irony that it’s the ever-widening duty differential between the UK and the Continent, created by the Treasury, which remains at the heart of the problem, any measures seeking to eliminate one of the biggest issues facing this trade are to be applauded.

The restrictions of General Election purdah, which prevents officials talking about any new initiatives in the pipeline, means details on Customs’ World Cup campaign to raise awareness of the problem are scant. But it’s activity like this that will hopefully dent the illegal market which continues to infuriate legitimate suppliers, wholesalers and retailers.

The fact that such a campaign is on the agenda at all, combined with the roll-out of new penalties to target businesses handling duty-evaded stock, is encouraging evidence that politicians are taking notice and want to see more action. Of course, it’s difficult to say how, in reality, that will actually translate into results.

But an official review to quantify the scale of fraud and how much it impacts on the trade, will be a valuable indicator. The detail that emerges from the work carried out by the National Audit Office should certainly make interesting reading.

The big unknown is whether a different government will share the current minister’s intent on duty.

Should we see a shift from red to blue, the hope is that a new minister won’t stand in the way of operational matters and overturn plans already firmly on the drawing board.

Consolidating prospectsAs speculation continues to grow about the merger of Constellation and Australian Vintage, fellow Antipodean Foster’s has shed some light on its aspirations for its portfolio. Blighted by poor global sales and overshadowed by its beer division, its results earlier this year fuelled rumours that it could be looking to get out of wine altogether.

But judging by our discussions with the group in Düsseldorf, where the international wine trade converged for the Prowein show last month, Foster’s still has a healthy appetite for the sector.

But there’s no doubt that beefing up its assets could make it more attractive to potential buyers should the “for sale” sign ever go up. It’s positive that a group of its size is sending out these smoke signals in the current climate and the London wine fair next month will enable it to put its plans in a UK context.

And, by then, the industry could be contemplating the prospect of more consolidation if Constellation and Australian Vintage do finally sign on the dotted line.

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