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Counterfeits:  Bad for business, exchequers and health...

Paul Skehan,spiritsEUROPE

Who are we?

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A Spirit of Growth…

● 46 product categories,  including a host of geographically-specific regional products, e.g. Scotch, Cognac, Polish Vodka…

● First agri-food export sector in EU

● 37.5 million of hectoliters of spirits drinks produced each year of which 26 million are sold in the EU through retailers and the HORECA sector

● Large contributor to national exchequers across Europe

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Export revenues for Europe…

€10,002,548,035(or €19,000 per minute…!)

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Agri exports:  A real European success story

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Where do we sell?  Top 10 Export Markets

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What is the problem?

● Illicit spirits trade► Undermines financial viability of the sector► Denies revenues to hard-pressed exchequers► Can threaten health and lives of consumers

● Fragmentation of effort► Multiple players, efforts, not aggregated

● Lack of joined-up, global response► Lack of awareness about extent of problem► Culturally sensitive in some countries – definition of problem► Difficulties in assessing scale

● First a case study from Latvia, then some other figures

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More generally…

● UK:  Each year Revenue & Customs calculates the estimated loss of tax on excise goods through criminal activity. For year 2011-2012:

● Lithuania:  Surrogates being classified as cosmetics, not subject to alcohol regulation constitute 7% of alcohol turnover according to LANA.

● Poland:  A project carried out in 2012 by the Polish Spirits Industry in partnership with the Ministry of Finance and others showed that the loss of direct tax revenues represents approximately €281 million annually. 

● South Africa:  In 2012, the spirit sector estimates (for spirits alone) an annual loss for the government of about €50 million.

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What is the solution?

● Need to understand the problem► Agree a taxonomy (work in progress)

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What is the solution?

● Need to understand the problem● Need to measure the problem in a consistent, comparable way

► Industry, COM, JRC… others?► Agree minimum basic characteristics (to make comparable)

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What is the solution?

● Need to understand the problem● Need to measure the problem in a consistent, comparable way● Need global response – political, enforcement, industry

► Interpol, Europol, WCO, OECD, BASCAP … who leads?

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Thank you!

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