Spirits New Zealand has welcomed the crackdown on illicit trade and organised crime, as illegally imported products are dodged at the border.
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, according to Spirits New Zealand.
“We estimate up to NZD 30 million per annum in excise is being dodged at the border through illegally imported full-strength spirits. This could be as high as NZD 50 million based on international trend data,” said Spirits NZ CEO, Robert Brewer.
“We’ve had a good working relationship with Customs and the Ministry of Primary Industries 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,” he added.
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 NZD 69 per litre of alcohol compared with approximately NZD 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 NZD 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,” said Brewer.
He said that it was perhaps more concerning that 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.
Brewer said it was fortunate that there had not been any impacts in this regard in New Zealand to date.
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