The Government’s plans to introduce a tax stamp for bottles and cans of beer could be illegal, according to lawyer DLA Piper, writes Gurjit Degun.
The warning comes as part of the British Beer and Pub Association’s (BBPA) submission to the consultation on tackling alcohol duty fraud.
The Government consultation proposes that beers from brewers that produce more than 200,000HL will have to be stamped. DLA Piper noted that the Government’s plans would be inconsistent with EU law, putting Whitehall on a collision course with Brussels over the issue. It described the current plans as “fundamentally flawed” and “wholly disproportionate,” saying that fiscal marks could be “replicated by fraudsters with great ease”.
The submission reiterates that fiscal marks on bottles and cans of beer could cost the brewing industry £100m. The BBPA argued that the plans could also shut hundreds of beer brands out of the UK beer market. It says the proposals should not be taken forward because they “fail in terms of proportionality, effectiveness, fairness and almost certainly legality”.
Instead, HMRC should step up its enforcement and apprehend the criminal gangs responsible for duty fraud, with intelligence and support from the industry, the submission explained.
BBPA chief executive Brigid Simmonds said: “These proposals are bad for brewers, bad for customer choice and almost certainly in breach of EU law. And in terms of tackling fraud, they would simply not work.
“There is much that can be done to tackle fraud, and the industry is fully committed to working with HMRC on this. HMRC now has additional resources. What is needed is the stepping up of enforcement, using intelligence and data that the industry is very willing to provide, and is already providing. Measures that impose crippling new costs are not the answer.”
At a hearing of the Beer Tax Fraud Inquiry in Parliament last month, Heineken’s UK’s head of legal Graeme Colquhoun said it was “not difficult to see the potential legal challenges” to the controversial proposal. “Personally I think it’s very likely,” Colquhoun said.
The All-Party Parliamentary Beer Group has held an inquiry into the Governent’s consultation, the group’s report will be published today.
