Duty fraud hits shop sales

09 March, 2012

Nearly three-quarters of retailers say duty fraud has hit their income, an OLN survey as part of our Fight Against Fraud campaign has revealed.

More than half said duty fraud had a small impact on their business, while a further 21% said it had a severe impact. Just 27% said it did not affect them.

“My beer sales are down 40%,” said one retailer, while another commented: “I would be naive to think it had no impact.”

Another added: “Anyone who sees very cheap drinks in the market then looks at us and wonders why we are so expensive.”

More than half of retailers (56%) suspected other shops in their area of selling duty-defrauded alcohol. For 41% just a few shops appeared suspicious, but 6% said they suspected around half the shops in their area, while 3% thought the majority sold fraudulent stock.

One respondent suspected that local restaurants were taking non-duty-paid alcohol: “It is more difficult to prove as they use it for by-the-glass sales.”

Fifty-eight per cent of those polled rated the government’s response to duty fraud as poor or very poor, while just 10% said it was good. “They encourage it as a going concern for criminals as the higher the tax, the more lucrative the illicit trade becomes,” said one.

Others complained that they had reported suspected fraudulent activity to HM Revenue & Customs but seen no action in response, and that they only ever heard about duty fraud issues through OLN – never from local news or other sources.

“Stocking up in Calais or Belgium and selling to your friends and neighbours is seen as a socially acceptable, victimless crime,” said one respondent.

However, just 12% of those polled said they could imagine themselves being tempted to buy illicit stock.

One said: “Having had a duty inspection a few years ago I know the lengths HMRC is willing to go to to find illicit stock. They found none here because our stock is all legitimate, but it was an exceptionally thorough check,” said one retailer.

Three per cent of those polled said they were seriously considering buying illlicit stock, while a further 9% said they had not been tempted yet, but could be if economic conditions worsened.





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