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U.S.-Style Three Tier System Could Address Beverage Alcohol Challenges in U.K, WSWA Says

October 30, 2013


The U.S. three tier beverage alcohol system has proven remarkably effective at protecting the public from the dangers related to an unregulated and unrestricted market. Officials in the U.K. should consider adopting a similar regulatory system to address a host of safety and revenue concerns. That was the message from the Wine & Spirits Wholesalers of America (WSWA) in comments filed yesterday with H.M. Revenue and Customs (HMRC), a United Kingdom tax and regulatory agency.

In recent months, the U.K. has experienced a wave of public health and safety incidents related to counterfeit or adulterated alcohol. Media reports have indicated that officials have identified as much as £1.2 billion (GBP) in uncollected tax revenue lost each year in the illegal market. In addition, consumers in the U.K. have consistently encountered adulterated or counterfeit product sold outside legal distribution channels, including fake products causing death or serious illness. WSWA’s comments pointed out how a system replicating the three tier model could address many of these concerns.

“As HMRC and others assess improved regulatory models, we would like to offer our expertise on the safety, benefits, efficiency and protections delivered by the U.S. three tier system and the important role wholesalers play in the process,” WSWA president and CEO Craig Wolf wrote in the comments. “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 comments also noted that the three tier system was designed to accomplish several objectives. The first was to ensure an orderly marketplace by preventing one tier, or one company or type of business within a single tier, from dominating the marketplace and exerting undue influence over other members of the industry or consumers, to the detriment of the public. Also guaranteed was protection against illegitimate sales and movement of product. Second, the system facilitated distribution while discouraging over-consumption and encouraging responsible consumption. Finally, the system created a process that allowed for efficient and appropriate government tax revenue collection.

“Today, the U.S. three tier system delivers adults the widest variety of products available anywhere in the world in a manner that controls access to of-age consumers, delivers tax revenue to government and protects public safety,” Wolf added.

A complete copy of WSWA’s submission is available here. HMRC is soliciting comments as part of an information consultation document entitled “Alcohol Fraud: Next Steps” published August 19.

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

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