As part of a renewal of Her Majesty's Revenue and Customs Alcohol Fraud Strategy, which was announced in the Budget earlier this year , a consultation on tax stamps and supply chain legislation was opened in March.
Proposals currently call for fiscal marks, or tax stamps, to be placed on all bottles and cans of beer brewed in the UK so suppliers can track products and cut out illicit beer consumption.
However as part of the consultation on the policy, the BBPA has disputed Government figures which estimate between 5 and 14 per cent of total beer consumption is illegal leading to tax losses of around £500m a year.
The organisation has presented a legal opinion from DLA Piper in its submission. The BBPA says HMRC should step up enforcement and stop criminal gangs as opposed to a policy that would 'fail in terms of proportionality, effectiveness, fairness and almost certainly legality and therefore should not be taken forward.'
Brigid Simmonds, chief executive of the BBPA, also says the tax marks could easily be replicated and the policy would set up a dispute between the UK Government and European officials.
"These proposals are bad for brewers, bad for customer choice and almost certainly in breach of EU law. And in terms of tackling fraud, they would simply not work," she said.
Simmonds argues the policy will damage pubs by reducing the choice of beers to drinkers and pushing already high costs up further. The organisation estimates the stamps could cost the beer and pub industry nearly £100m a year.
“There is much that can be done to tackle fraud, and the industry is fully committed to working with HMRC on this. HMRC now has additional resources. What is needed is the stepping up of enforcement, using intelligence and data that the industry is very willing to provide, and is already providing. Measures that impose crippling new costs are not the answer," she added.
An inquiry by the All Party Parliamentary Beer Group into the issue of beer tax fraud is due to announce its findings and recommendations later today - full details will be available on BigHospitality tomorrow.