dodgy distributors
Illicit trade

The illegal trade in alcohol and tobacco represents the biggest threat to the profitability of law-abiding wholesalers in the food and drink sector.

Duty-avoided beers, wine and spirits cost the Exchequer £1.3bn in lost revenue in 2015/16 as criminal gangs have taken trade away from legitimate wholesalers.

Since the introduction of the Alcohol Wholesaler Registration Scheme in April 2017 (a scheme which was proposed to Government by the FWD) we’ve seen a marked decline in the illicit trade in alcohol. Consequently sales are returning to responsible, registered wholesalers and at the same time revenue is rightly returned to the Exchequer.

The scheme is proving to be highly successful in driving out fraudulent activity, but there is still more work to be done, particularly on enforcement. FWD are therefore continuing to engage with HMRC to ensure HMRC have the right processes in place to ensure accountability in the scheme.

FWD is also engaging with the newly established Illicit Trade All Party Parliamentary Group – a group of MPs who are concerned about Illicit Trade. Through this group FWD is able to raise members’ concerns with cross party Parliamentarians on these issues.

Side effects of sugar tax
Soft drink smuggling

Following the introduction of the Soft Drinks Industry Levy on high sugar products in April 2018, we are now concerned about the rise of a soft drinks grey market.

There is a risk that unscrupulous importers will bring stock into the UK that has not been subject to the levy.

These products will then be sold directly to retailers, possibly via white van sales. FWD is working closely with industry partners to call on Government for greater enforcement measures and to provide HMRC with adequate resources to conduct spot checks regularly and to invest in inspectors.

What you can do: If you notice any drop off in sales of high sugar soft drink skus, or retailers say they’ve been offered these lines at very low prices, please let us know, or report it to the Customs Hotline


Trace and trace

From May 2019 a tracking system for tobacco products will be introduced in the UK. Articles 15 & 16 of the Tobacco Products Directive 2014/40/EU, require Member States to introduce a tracking system and anti-counterfeiting security markings for tobacco products. For cigarettes and hand-rolling tobacco, systems must be in place from 20 May 2019, and for other tobacco products (such as cigars and pipe tobacco) from 20 May 2024.


The tracking system requires all unit packets and aggregated packaging (cartons, mastercases and pallets) to be marked with unique identifiers. Those who need to apply for unique identifiers will purchase these from an IT Provider appointed by each Member State. All products must be scanned when they are manufactured in, or imported into the UK, and then on their receipt and dispatch with each point in the supply chain. The final scan will be the product’s dispatch to the retailer. All manufacturers/importers, and those economic operators who receive tobacco (including retail outlets), must apply to the IT Provider (not yet appointed) for an operators code.


The legislation has been published by the European Union and comes into force on May 6: Member States now have 12 months to appoint an IT provider to fulfil their obligations under the Directive.

HMRC will appoint an ID issuer over the next six months. Once one has been appointed, you will need to apply for an economic operator code and a facility identifier code.