UK: Call for UK to Adopt US' Three-Tier Alcohol System
Eighty years ago, November 14, 1933, Florida approved ratification of the 21st Amendment to the U.S. Constitution, ultimately repealing the 18th Amendment and ending Prohibition. Today, the state’s wine and spirits industry supports a multi-million dollar economy, employs thousands of workers, and provides millions of dollars in tax revenue to the state and federal governments.
Marking this occasion, the Wine & Spirits Wholesalers of America (WSWA) released a detailed economic snapshot of the industry’s impact in Florida.
The wine and spirits industry supports 53,740 direct jobs in Florida, which includes more than 6,080 workers at wholesaler firms. The total economic impact of the industry in the state is $10.3 billion, according to an economic analysis released by WSWA and prepared by New York-based John Dunham & Associates.
Beyond wages and economic impact, the modern wine and spirits industry in Florida generates a total of $1.7 billion in state business and consumer taxes.
“The 21st Amendment paved the way for the creation of the modern three-tier beverage alcohol regulatory system that today delivers the widest variety of products available to consumers anywhere in the world in a manner that is safe, well-regulated, and ensures reliable revenue streams for the states and federal government,” WSWA President and CEO Craig Wolf said.
Wolf pointed out that even today in Europe, Asia and Latin America, consumers regularly suffer because of unsafe, adulterated or counterfeit beverage alcohol. He said these issues are non-existent in the United States largely because of the regulatory framework enacted by the states and federal government under the 21st Amendment.
WSWA is the national trade association representing the wholesale tier of the wine and spirits industry. It is dedicated to advancing the interests and independence of wholesale distributors and brokers of wine and spirits. Founded in 1943, WSWA has over 350 member companies in 50 states and the District of Columbia, and its members distribute more than 70 percent of all wines and spirits sold at wholesale in the United States. More information is available at www.wswa.org.The UK should consider adopting a similar structure to the US' three-tier alcohol system to tackle alcohol duty fraud, a trade group has recommended.
The Wine & Spirits Wholesalers of America (WSWA) has written to the UK's HM Revenue & Customs arguing that having an independent wholesale tier would be the “most effective solution” for dealing with crime around alcohol tax and counterfeiting. The group was responding to an HMRC consultation launched in August on UK alcohol fraud.
The US' three-tier system, set up after Prohibition, keeps alcohol producers, distributors and retailers seperate. It means producers can only sell to wholesalers, who then sell to retailers. Some state governments also control the distribution tier, and some the retail tier.
“We would encourage you to consider the implementation of just such a system in the United Kingdom, with a mandated independent wholesale tier, as the most effective solution for the varied and difficult problems your country is facing,” WSWA's president & CEO, Craig Wolf, writes in the submission, made public yesterday.
Wolf also argues that the three-tier system has been “remarkably effective at preventing monopolisation in the marketplace” as well as protecting the public from illicit products and stopping under-age sales.
HMRC estimates that alcohol duty fraud costs UK taxpayers GBP1.2bn (US$1.9bn) a year. Earlier this month, a report estimated the tax gap on alcohol in 2011/12 was around GBP700m, or 6.6% of the total sector.
HMRC's consultation – Alcohol Fraud: next steps – closes on Monday (4 November).
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