Significant increase in counterfeit alcohol seizures

Spirits - mainly vodka - is the most common category of alcohol to be counterfeit.

The Revenue Commissioners have warned of significantly increased activity in counterfeit alcohol production this year which has found its way into clubs and pubs.



17 September 2013

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That ‘increased activity’ equates to a whopping 350% increase to 840 litres via 12 seizures to the end of July – and that’s only seven months into 2013 compared to the 232 litres in the whole of 2012 through seven seizures.

Spirits – mainly vodka – is the most common category of alcohol to be counterfeit. It’s bottled and packaged to resemble the genuine product. In many cases the alcohol is sourced from the industrial alcohol sector and may contain high quantities of methanol.

The bottles are filled with raw alcohol to a predetermined amount and then diluted with water to the normal strength of alcoholic spirits on the market – approximately 40% or 37.5% ABV. The bottles used in this process are generally genuine bottles, sourced from recycling centres, pubs and other places where they may have been discarded.

And the selling of counterfeit alcohol is not all door-to-door.

“Small quantities of counterfeit alcohol have been detected in pubs and off-licences,” state the Revenue Commissioners, “In some instances these may have been supplied by a caller offering alcohol at a competitive price. Larger quantities that have been encountered involved an individual trying to distribute via the trade or selling at local markets”.

Those involved in the illegal tobacco trade are thought to be also involved in this activity.

Pubs have been subject to inspection.

“We carried out searches throughout the year and we always ensure that we try to prosecute pub owners in these cases,” said Michael McGill of The Revenue Commissioner’s Central Investigation Branch.

Concern over counterfeiting is justified – not just from a Revenue point of view – two years ago in Poland 20 people died from drinking illicit alcohol.

In premises where illegal alcohol has been detected, it’s evident that there’s no quality assurance process in place and that hygiene is virtually non-existent, state the Revenue Commissioners.

Counterfeit closures (the metal caps on bottles), originating mainly in China and Eastern Europe, have been detected and seized on importation by Revenue which has also detected and seized counterfeit labels produced mainly in China and the Far East.

In 2009 Revenue’s Customs Service detected and seized approximately 500,000 counterfeit ‘closures’ in one specific seizure. The detection of 500,000 closures was a once-off detection, however it does indicate the potential trade.

Each individual ‘closure’ represents the potential counterfeiting of one litre of spirits.

The potential loss to the Exchequer from this seizure in 2009 was approximately €5.8 million in Excise Duty.

In its Budget Submission NOffLA pointed out that alcohol products are prime targets for counterfeiters in the European market due to their brand value, high tax and the excise component of the final price. All of this adds to the price that can be charged by counterfeiters.  According to the Revenue Commissioners,  the number of seizures of counterfeit and contraband alcohol in Ireland has increased from just above 100 in 2008 to over 350 seizures in 2012.

“The key incentive for counterfeiters to engage in illicit alcohol trade is the possibility of achieving high margins,” stated the off-licence Association, “Countries with high alcohol duty (eg Scandinavia, Ireland) are more vulnerable to illicit trade in alcohol.  Smugglers can purchase generic alcohol products in low excise duty countries and then sell them in countries with high excise duty rate, hence making a profit based on the difference between excise duty rates.  

“Ireland has one of the highest levels of excise duty which provides a high incentive for counterfeiters to enter the Irish beverage market. The current legislative and enforcement systems in the area of illicit trade do not act as strong enough disincentives. In many instances the benefits of carrying on illicit activities are considerably higher than the penalties and risks of being prosecuted.”



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