Smuggling cost hits £1bn a year

Related tags All-party parliamentary beer Duty

New figures show that £1bn a year is lost in taxes to smugglers - amounting to costs of £12,000 a year for the average pub.Smuggling also cripples...

New figures show that £1bn a year is lost in taxes to smugglers - amounting to costs of £12,000 a year for the average pub.

Smuggling also cripples the rural pub industry and contributes to underage drinking, according to new research from the British Institute of Innkeeping (BII).

The BII's chief executive John McNamara said: "The social costs of giving alcohol to youngsters and the financial costs to the industry are issues that need to be addressed.

"The average pub loses £12,000 a year in sales every year and we're losing five pubs a week, but there is a solution: cut beer duty."

Many MPs - together with the BII - fear that now the government has relaxed customs checks at ports and has failed to mention a duty cut in the pre-Budget statement, the situation could spiral out of control.

The BII's special report was published this week with the support of the All-Party Parliamentary Beer Group.

MP Jane Griffiths, chairman of the beer group's excise duty panel, said: "The problem of bootleg alcohol may have got worse because Customs and Excise is not randomly stopping people at ports anymore. People think they can do what they want because they won't be stopped."

Jonathan Neame, managing director at Kent brewer Shepherd Neame, said: "We want the government to bring duty in line with France so that smugglers and ordinary people have no need to cross the Channel to buy cheap beer."

The company took the government to court in 1999 to protest against the Chancellor's penny-on-a-pint duty hike.

"We didn't win, but duty hasn't been put up since so we did gain something out of it," Mr Neame said.

Smuggling of bootlegged beer has increased since a High Court ruling in July forced customs officers to halt their heavy-handed tactics.

Gerry Dolan, senior policy adviser for Customs and Excise, said: "Within hours of the ruling there was a noticeable increase in the number of vans crossing the Channel.

"This proves the 'white van man' has not gone away. It also demonstrates that these people can easily and quickly change and adapt to any climate change."

The BII's report also discovered more shocking proof that children as young as eight are continuing to be sold bootlegged alcohol.

This is the third year in a row it has uncovered such evidence.

Mr McNamara said the government's excuse for not cutting duty in the past was because of customs' stringent security checks at ports, which can no longer be used.

Duty facts:

  • beer duty in Britain (at 33p per pint) is 725 per cent higher than in France and 154 per cent higher than the European average
  • since 1992, Britain has raised its excise duty by 17 per cent, while other member states have moved towards the EU target rate of 7.6p per pint
  • it is calculated that every 1p on duty resulted in an additional 125,000 pints being imported from Calais every day - much for illegal re-sale
  • the All-Party Parliamentary Beer Group says that cutting duty by 6p would eradicate smugglers' profits.

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