An HMRC report in February claimed alcohol fraud costs the UK nearly £1.2bn a year as a result of lost taxes due to illegal production, counterfeiting and large scale smuggling of duty unpaid goods largely by criminal gangs.
In the report the HMRC argued the scale of the fraud left it powerless to seriously reduce the level of activity by enforcement alone - instead regulation or 'legislative measures' were needed to reduce fraudsters' access to popular alcohol brands. However the BBPA has said its new plan eliminates the need for costly and unnecessary legislation or red tape.
The worst problems, according to the HMRC, are with beer fraud with claims between 5 and 14 per cent of total beer consumption is of products where duty has not been paid.
A consultation, which ends on 25 June, is now underway to gauge industry and expert reaction to so-called fiscal marks on packaged beer, supply chain legislation and registration of alcohol wholesalers.
As part of the consultation the influential All Party Parliamentary Beer Group (APPBG) of MPs and Peers is currently conducting an inquiry into the issue - how significant the problem is and what the level of response should be. An assembled panel of MPs is currently taking responses from the brewing and pub industry after representatives of the former approached the APPBG with concerns the HMRC were considering legislation on unreliable data.
Under the duty mark plan beer bottles, cans and small containers would be stamped with a 'UK DUTY PAID' label similar to that on cigarettes. The Government has indicated low-risk products such as draught beer, high alcohol volume products and those from small breweries might be exempt.
Announcing the BBPA plan to tackle beer fraud, Brigid Simmonds, chief executive of the organisation, said the problem was not on the scale HMRC were claiming and labelling was disproportionate and would not solve the issue.
"These common sense proposals are the right way forward. They reflect the fact that HMRC already has the powers to tackle fraud - and we can get results by working more closely together. The current strategy is still to be fully implemented and we certainly don’t need costly new legislation or beer stamps, which would be a huge new burden on our industry at a time when the Government says it wants to cut red tape," she said.
The BBPA plan involves the HMRC improving its monitoring and enforcement measure, the industry collecting and sharing more data on movement and trading patterns of beer and registration for alcohol wholesalers.
The formal consultation ends in June but the APPG inquiry, which has received the BBPA plan, is expected to have more time from the Treasury to collect responses and formulate a reaction.