Tuesday, 27 September 2011

Do You Believe This?


According to HM Revenue and Customs, illegal imports of beer - beer that has not had UK duty paid on it - amounts to 14% of UK beer volumes. Now I am assuming here that legally imported beer for personal consumption is not included in these figures, but then again can that be so, as including those beers would make the problem much worse? On the other hand then legally imported beer for personal consumption can be sold illegally. Is that what they are saying, or is it some kind of some kind of combination? What do these guesstimates really mean?  It's as clear as mud.

The problem with this sort of thing is that when you start to think about it, the whole premise becomes less and less likely. Where does this beer come from? Where does it go? Is it being imported in such quantities when we are told supermarkets are giving it away? It can't be being sold in pubs to any great extent either can it? For such quantities to be true, you'd have to import it by the truck load rather than the (white) van load and surely HMRC and the Immigration Department still check loads, even if it is just for VAT, security and illegal immigrants? It all seems rather far fetched to me.

The Revenue say that the country is losing (in 2009/10) an incredible £800 million in duty due to this. (Spirits which to me is more believable, account for another £440 million). This is up an incredible 40% in one year.

Anyone got any thoughts on this?

Coming on the day after the publication of the Cask Report, this would mean that illegal beer imports exceed total cask beer sales.

10 comments:

Owen said...

How are they measuring consumption? If 14% of consumption is off the books, then how are they counting it?

Graeme said...

I would guess that this is bulk smuggled beer, not your man driving his MPV to Calais and back (and also not illicit breweries in the UK). Stuff coming in hidden in shipping containers, etc. I very much doubt that HMRC or immigration have the time or manpower to check even a small percentage of UK imports - think how big a container ship is when it arrives at a big dock like Southampton.

Though, 1 in 7 pints does seem like a lot of beer to be illicit, I would guess a lot of it must go through small independents, or (possibly) shady wholesalers who may well sell to unknowing pubs and clubs.

It's also hard to know how often raids like this happen: http://www.bbc.co.uk/news/10405275 and how much is missed I suppose, but my guess is that raids and seizures are where they get their estimates from.

Curmudgeon said...

It does seem a bit questionable - do you have a link for this? 5% I could have believed, but surely if you're smuggling alcohol the risk/reward ratio is much better with spirits.

Perhaps it's something to do with the Polish community...

Saga Of Nails said...

There's an easy way to check the figures. Go through a certain amount of recycling and count the imported, undutied stuff. That's what they did with fag packets. I don't believe that figure for one minute. You are talking of hundreds if not thousands of lorries with smuggled goods getting through every day.

Simon Johnson said...

Total consumption is estimated by adjusted figures from the Family Spending Survey. Paid-for consumption is calculated from revenues received plus cross border trade. The illicit trade is the tax gap between the two.

Cross-border smuggling isn't as important as non-existent exports. Tax isn't paid on export. If you don't export the beer, you don't pay the tax. No need to smuggle over the border if it's already in the country.

If anyone is desperate enough to want the details, methodology and figures can be found here:

http://www.hmrc.gov.uk/stats/measuring-tax-gaps.htm

(I have to know this stuff for professional purposes. Honest).

Steve Lamond said...

but surely the family spednign survey doesn't take into account stuff imported for own consumption or drunk outside of the country, it justs asks for an average weekly spend? Maybe they're just pissed off beer revenues are falling and want to find something to blame the loss on.

Cooking Lager said...

IT's nowhere near 14% but CAMCL have the infrastructure in place to chunnel slabs of Stella, Krony & 33 Export from Calais when minimum pricing comes in.

Tandleman said...

Strikes me that a large chunk of the missing millions is accounted for by people being unable to afford beer as much and the Treasury assuming they still can.

RedNev said...

I'm dubious about these figures too, but they are THEIR figures and we should beat them over the head with them as an example of what the high level of beer tax is doing, and that further increases in duty will push these figures higher, rather than raise more revenue. Unless of course they employ 10,000s more Customs officers instead ...

But at a time of sweeping public sector cutbacks, that won't happen. Their choice: stop raising tax or accept ever-increasing illicit alcohol imports.

HardKnott Dave said...

Cask beer, according to the excellent Cask Report, is 15% of on-sale beer. If memory serves, total beer consumption is roughly equal on-trade to off trade. Therefore cask beer accounts for around 7.5% of total sales. Illegally imported beer is much more than cask?

Come on HMRC, this isn't right.