Tan Parsons investigates what alcohol registration means to wholesalers and retailers
Currently, 9% of beer and 6% of wine is sold illegally in the UK to the legitimate supply chain. When you add illegal spirits to the mix, this dirty trade costs the taxpayer £1.2bn annually.
So the Chancellor’s decision to introduce a registration scheme for alcohol wholesalers is a big step towards tackling the illicit booze industry.
A technical consultation is under way through which the HMRC will hammer out the details of the scheme, exactly how it will work and what it will mean for wholesalers. It is expected to be implemented in 2016. The FWD, which has been lobbying for this for four years, has welcomed it as a “victory for the good guys”.
Take action now
- Inform and educate: Tell your retail customers about the up-and-coming registration scheme and what they need to do to make sure they buy stock from legitimate wholesalers.
- Check the register: Both retailers and manufacturers will be responsible for checking a database of registered companies to ensure their business partners are trading within the law.
- Make your licence visible: Hang your licence up in a high-traffic area so that customers can see. Shout about it in marketing and promotional materials.
Chief executive James Bielby says: “With this announcement, HMRC has the tools to ensure that only law-abiding wholesalers can buy or sell alcohol. While the new regime will place an administrative responsibility on FWD members and others who trade legally, it will expose and exclude those who are breaking the law.”
However, the proposal is not entirely without controversy, because the onus will be on retailers to check that the depot where they buy their booze is signed up to the scheme.
It is understood that both retailers and suppliers will be responsible for checking a database of registered companies to ensure their business partners are trading within the law.
The FWD, which has been lobbying for this for four years, has welcomed it as a “victory for the good guys”
Before the scheme was given the green light in George Osborne’s Autumn Statement, the Association of Convenience Stores warned that the burden of checking wholesalers’ credentials could dump a total regulatory bill of more than £8m on independent retailers.
Since then, ACS public affairs director Shane Brennan has assured Better Wholesaling that his group is working with HMRC to ensure costs are minimised.
Imperial Cash and Carry already has some experience of registering to sell alcohol, because of its retail business, The House of Drinks, which delivers drinks directly to the consumer.
Trade marketing and retail club manager Nikkita Mulchandani says it is worth wholesalers taking steps to make it as easy as possible for their customers to see that the depot where they are buying their booze is a registered member of the scheme.
“We will inform our retailers of our alcohol licence by keeping it framed somewhere prominent in the cash & carry and also through our mailings and news section on our weekly emails,” she says. “Forcing wholesalers to be licensed means that there will be a greater control on those trading illegally.”
While the proposal has been welcomed by wholesalers across the board, some argue that the criteria for entry onto the register will determine its success.
Simon Hannah, managing director of JW Filshill, warns: “If it’s not robust enough and anyone can register, it will become a pointless exercise