Beer importers would drastically cut the number of brands they bring into this country if beer duty stamps are introduced, while UK brewers would dramatically reduce exports, the inquiry into beer tax fraud has heard.
Miller Brands UK managing director Gary Haigh said importers would be "under pressure" to stop importing around 2,000 of the 2,200 beer brands that are shipped into the UK if the stamps are introduced as the Government intends.
He listed the Miller Brands products that his company would stop bringing to Britain if the stamps were introduced.
“We would remove [Belgium beer] St Stefanos. We would remove Peroni Gran Reserva, we would remove Peroni Red, we would have a very close look at the Pilsner Urquell brand,” he told a hearing of the inquiry in Parliament.
“We would stop supplying bottles to the Channel Islands and we would also stop supplying Peroni Nastro Azzurro and Pilsner Urquell into the Republic of Island.”
Haigh said the reason is the extra cost of creating different lines, some with duty stamps and some without.
“I think [the duty stamp proposal] is going to create complexity, I think it’s going to create bureaucracy, and I think it’s going to bring a range of unintended consequences and the reduction in consumer choice," Haigh said.
The inquiry also heard that the duty stamp requirement would force Shepherd Neame to abandon about 90% of its exports.
Tom Falcon, production and distribution director at the Kent-based brewery, said the requirement would mean a company like Shepherd Neame could not simply send across bottles from existing batches abroad. Instead it would have to produce new, 'short' lines that didn’t include the stamps.
“Our ability to be able to transport [drinks] for export and take opportunities in other markets becomes unviable,” Falcon said.
“We would be looking at reducing export skews [lines] from around 40 to around four. We currently export to 20 countries. I don’t know how many that would reduce to.
“I think fiscal marks is one more nail in the coffin of the cost burden the industry has to take."
He added: “We can’t over-emphasise the impact this will have on us."
Falcon said Shepherd Neame has estimated the cost of rolling out technology to track duty stamp barcodes on cases of beer would be £350,000, plus an addition £150,000 per year in administration costs. “That just pushes us out of the market in terms of competitiveness.”
He said there was “no evidence of duty fraud on Shepherd Neame products on any level,” saying the firm deals with “more established” wholesalers.
Speaking on behalf of the Independent Family Brewers of Britain, Falcon added: “We don’t see [beer duty fraud] as being caused by our members products, or our members policies.
“We believe this fraud is largely within small independent wholesalers and some of the illicit wholesale trade.”
He called for further enforcement of wholesalers, and urged HM Revenue & Customs to undertake more inspections at docks.
“You’ve got vehicles coming [into the UK] almost willy nilly, and I think there’s a lot that can be done with that,” Falcon stressed.
He said duty fraud is exacerbated by the duty differential between the UK and the rest of Europe. The level in Britain is seven to eight times that in France, he pointed out, and the problem is “compounded” by the duty escalator.
The Beer Tax Fraud Inquiry is headed by the All-Party Parliamentary Beer Group, and is set to report its findings to the Government this summer.
