Independent retailers must avoid the temptation to buy illegal stocks of beer to compete with supermarkets’ irresponsible promotions, says the Federation of Wholesale Distributors (FWD).
Asda’s £11 deal on Budweiser 24x300ml packs means the supermarket is selling to the consumer at less than the price that legitimate wholesalers can offer to convenience stores and off licences, and FWD believes this will boost the illicit trade in beer on which UK duty has not been paid.
FWD chief executive James Bielby, said: “Asda’s ploy to undercut its competitors with this irresponsible promotion not only flies in the face of the Government’s attempts to prevent supermarkets deep-discounting alcohol, it also puts enormous pressure on thousands of independent stores across the country to compete, and we are concerned that some will turn to the growing ‘grey’ market to source cheaper stock.”
Recent Government figures reveal that duty fraud on beer rose 45% to £800m in lost tax revenue in 2009-10. “Supermarkets’ tactic of selling beer at less than production costs plus duty and VAT encourages desperate shop owners to be less scrupulous about who they buy their stock from,” said Bielby. “We urge retailers to stick with their tried and trusted wholesalers, and we ask the Government to urgently put a stop to these irresponsible promotions which are a gift to smugglers and duty fraudsters.”
The FWD is asking the Government to introduce duty stamps for beer products to disrupt the criminal distribution chain.