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Last Updated: Monday, 23 February, 2004, 14:28 GMT
Taxing question over whisky stamp
Whisky bottle
Whisky is a target for bootleggers
Whisky industry bosses have been holding talks with a government minister about proposals to introduce tax stamps on bottles.

The measure is designed to combat fraud, but there are fears the scheme will cost too much to introduce.

Customs Minister John Healey has held discussions on the industry's options on visits to two distilleries.

Scotch whisky is a �2bn industry but the treasury claims more than �600m a year goes missing through fraud.

That amounts to one in every six bottles.

The UK Government wants to introduce a new pre-paid tax stamp to combat fraud.

We'll tackle fraud by a new system of guarantees, where the onus is on the person who is moving the goods
Gavin Hewitt
Scotch Whisky Association
Speaking in Dumbarton, Mr Healey said: "This has been very useful because you can't get a good impression from sitting at a desk in Whitehall, or meetings with the industry round a table in London.

"So I can see some of the practical problems here, I can understand why the companies don't want to, but they can apply tax stamps if we have to bring them in in the UK."

However, politicians from all parties have condemned the plans, pointing out it could cost more than �280m to implement.

They also claim that the scheme was abandoned by other countries after counterfeiters simply forged the new labels.

John McFall MP, a member of the parliamentary whisky group, said: "What we have to remember is that the Scotch whisky industry is a �2bn industry and we do not want this to affect competitiveness and productivity."

March decision

The Scotch Whisky Association believes tax stamps would just be counterfeited and outlined its own solution to the minister.

Chief executive Gavin Hewitt said: "We'll tackle fraud by a new system of guarantees, where the onus is on the person who is moving the goods, not on the warehouseman or the producer.

"We'll also tackle it by a revised system of procedures in warehouses, notification of any suspect movement to Customs and Excise."

The National Audit Office has also been asked to look at the estimated fraud figures, cited by Chancellor Gordon Brown as evidence of the need to clamp down.

The final decision on the system adopted will be announced in the budget next month.


WATCH AND LISTEN
BBC Scotland's Kirsten Campbell
"These labels are worth more than �5 each"



SEE ALSO:
New test will scope out fake dram
12 Feb 04  |  Scotland
Whisky fraud claim investigated
06 Feb 04  |  Scotland
Indian malt tickles tastebuds
12 Dec 03  |  Scotland
Brown vows whisky duty action
11 Dec 03  |  Scotland
Anger at whisky stamp plans
10 Dec 03  |  Scotland
Whisky branding deal reached
04 Dec 03  |  Scotland
US spies monitor whisky plant
27 Sep 03  |  Scotland


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