Spirits Industry Welcomes Crime Crackdown. Says $30 Million Lost From Illegal Spirits Trade

It’s hoped that recent announcements on illicit tobacco and a more organised focus on organised crime will pick up on the illegal trade in spirits, says Spirits New Zealand.

“We estimate up to $30 million per annum in excise is being dodged at the border through illegally imported full strength spirits. This could be as high as $50 million based on international trend data,” says Spirits NZ CEO, Robert Brewer.

“We’ve had a good working relationship with Customs and the Ministry of Primary Industry’s on this issue with a degree of success in terms of some recent prosecutions but welcome the recent Government announcements as what we’ve achieved so far is the tip of the iceberg,” says Robert.

Illegal trade in spirits is a global issue and occurs because of the heavy excise loading for full strength spirits compared with beer and wine. In New Zealand spirits are charged $69 per litre of alcohol compared with approximately $38 per litre of alcohol for beer and wine.

“This differential opens the door for illegal trade as a criminal may declare a container contains beer when it contains spirits – they then pocket the $31 per litre excise difference when they sell it through. Or they simply declare the container having something completely unrelated to alcohol and grab the entire excise amount,” says Robert.

And perhaps more concerning is once the illegally declared product is in the country there is a risk that the liquid inside the bottle is not safe.

“If illegally imported product does not come through legitimate channels we cannot guarantee the contents are safe. Aside from lost tax take and the impact on the honest importer and retailer the potential consumer health impact of illegally produced spirits is not worth thinking about.

“It’s fortunate we have not had any impacts in this regard in New Zealand to date.”

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