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HIGH TAXES BLAMED FOR RISE IN SPIRITS COUNTERFEITING

A study from the Institute of Economic Affairs (IEA) has claimed that “high alcohol duties are pushing people to purchase booze from the black market.

“As the duties continue to rise, it is expected these fakes will continue to flood the market, harming the genuine brands.” The study estimated that counterfeit alcohol is costing the UK Treasury £1.2billion every year, losing more money to the “cross-border movement of alcohol than any other EU state.”

With the scale of counterfeit alcohol on the rise, there is huge concern about the damage fakes can inflict, especially following a spate of methanol-related deaths in the Czech Republic recently, which have now reportedly risen to 40 cases.

Last week an inquest in the UK heard that a man in Worthing, West Sussex, who is thought to have drunk counterfeit vodka, died in his home.

With fakes on the rise, drinks companies have called on the world’s governments to do more to tackle the problem.

Pierre Pringuet, chief executive of Pernod Ricard, told the Financial Times: “It is very important that we can get some counterfeiters sentenced to jail because the fines are ridiculously low compared to the benefit they can get from counterfeiting.”

Michael Patten, Diageo’s global head of public affairs, agreed that more needs to be done to tackle the rise in counterfeit alcohol. He said: “We tend to see an uptick in these illicit products when prices go up driven by tax. If alternative supplies are in place, people switch even though they are exposed to greater risk.”

In a bid to battle the problem many spirits companies are adopting anti-counterfeiting measures such as hologram labels, which are more difficult to fake, and anti-refill closures to make it harder to refill empty bottles from well-known brands.

Source: http://www.thespiritsbusiness.com/2012/11/high-taxes-blamed-for-rise-in-spirits-counterfeiting/