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Level of wine duty fraud would make it biggest player in UK market, says Conviviality chief

Webb's comments come on the back of the release of the official figures from HMRC last week in its "measuring tax gaps", which estimates illicit wine sales could cost the Exchequer up to £700 million, equating to 11% of the market.

While the trade welcomes the release of the figures, it is also a sobering reminder of the extent of the problem, which HMRC revealed in 2011/12 cost the Exchequer at least £350 million from wine intended for European export being criminally diverted back into the country. It estimated that as many as one in 16 bottles were sold illicitly in the UK.

Webb said: "We are pleased the HMRC has managed to achieve and estimate the loss to the Exchequer, and look forward to its increasing interest to the wine element of the problem. However, it is likely to have underestimated the amount of legally branded, duty-evaded wine in the market."

He added: "As with all our franchisees we will continue to provide weekly details to the HMRC of leaflets that advertise wines at unachievable market prices."

David Visick, director of communications for the Federation of Wholesale Distributors, was asked which of the figures FWD thought were accurate. He told Harpers: "It's hard to say - some of our members say the decline in sales in recent years indicates a higher figure, more like the £550 million a year lost to beer fraud - but we don't have any way to confirm that. The unofficial estimate before last week's official one was the same figure, £350 million, and that's the measure we've used in the past, so the new [£700 million] assessment was not a surprise."

He added: "The difference, however, is that HMRC now has no excuse not to track down and close the illegal operators, so they can show a reduction in that revenue loss year on year in future and return sales to the legitimate wholesalers."

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