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Last Updated: Wednesday, 3 March, 2004, 17:21 GMT
Measures aim to beat whisky fraud
Whisky distillery
Whisky is worth 2bn to Scotland each year
Scotch whisky industry leaders have presented the Treasury with plans to tackle customs and excise fraud.

It follows UK Government proposals to introduce tax stamps on bottles in an attempt to stop 600m a year going missing.

The industry fears the scheme will cost too much to introduce and has pledged improved guarantees and inspections.

In a separate move, Scottish MPs began an investigation into the controversial stamp plans.

The whisky industry is worth billions of pounds to the Scottish economy every year and employs more than 40,000 people.

Strip stamping

But claims that fraud is depriving the Treasury of the duty on one in every six bottles of spirits sold are now the subject of an investigation by the National Audit Office.

Chancellor Gordon Brown has vowed to introduce new measures to stop the duty fraud.

Under the "strip stamping" scheme all bottles of spirits would carry a stamp worth 5 to prove that taxes and duties have been paid.

Whisky bottle
Millions in tax revenue is lost every month
But the Scotch Whisky Association (SWA) said its proposals would be more efficient and could be brought in more quickly.

Last week the SWA outlined a new system of guarantees, where the onus is on the person who is moving the goods, and a revised system of procedures in warehouses aimed at alerting any suspect movements.

Spokesman Campbell Evans said: "The chancellor set us a challenge at the PBR (pre-Budget report) and we've answered that by bringing forward proposals that we'll have in place in the next nine to 12 months.

"That's two years quicker than tax stamps would be, it's more money than tax stamps would bring in and more importantly it's more robust and enduring than tax stamps, which we know from overseas don't work."

In a separate move, industry representatives had a second chance to put their case when they appeared before MPs on the Scottish Affairs Committee.

SWA chairman Ian Good told the committee that the stamp system would not stop fraud, would cause security problems at some distilleries and could put some out of business.

BBC Scotland's David Porter
"Whisky producers dispute the figures"

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