Whiskies of mass deception

Whiskies of mass deception

Every day, a game of cat-and-mouse goes on between licensed venues and those protecting the spirits trade. In the middle is the drinker, who is being conned to the tune of millions. Dominic Roskrow reports

News | 09 Jun 2003 | Issue 31 | By Dominic Roskrow

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If any Trading Standards officer visiting licensed premises wanted a change in career, they could easily give Hans Blix a call and sign up as weapons inspectors.They are in the front line in the battle to stop unscrupulous licensees swapping branded spirits for cheap substitutes. And watching the weapons inspectors over the last few months, they will have recognised the alleged tricks of delay and deception.For, hard to believe as it may seem, thousands of publicans, restaurateurs and club staff are going to great lengths to pass off inferior products to the public and to hide the deception from the authorities.“There is evidence that publicans are ringing other pubs to tip them off that Trading Standards officers are in the area,” says Philip Scatchard of the International Federation of Spirits Producers, which protects the interests of major spirits firms.“They know that Trading Standards has limited resources and that they are unlikely to visit in the evening, so some replace their spirits only at night and at the weekend. They have become increasingly clever in covering this up.”‘Tipping’ is a simple enough crime. You empty a bottle of branded spirits, fill it up with a cheap version as many times you like, and pocket the difference between the spirits you’re selling and the full price the customer is paying for what he/she thinks is a branded product. With inferior whiskies often available at a fraction of the price of top branded ones, the temptation is there to put the cheaper whisky into a bottle of Bell’s, Famous Grouse or Teacher’s and make a small fortune. Collectively, in fact, this fraud runs to millions of pounds.Gin, vodka, rum and blended whisky are the most obvious targets, but malts have been affected too. And whisky faces another problem; it’s much harder to detect. Substituting can only be identified by laboratory analysis, and not by a simple test in situ, as with other spirits.Overall, the problem is a massive one. Fraud in the United Kingdom alone is estimated to be worth £500 million. With duty levels varying so greatly across the world, there is a huge international dimension that the big drinks companies are only now starting to identify. And in the UK, the tipping problem is estimated to be costing customers £20 million – but that’s just the bit the authorities know about.For four years, the IFSP has targeted the UK pub sector in a bid to control the problem, with notable success. Its research shows that the number of pubs offending has been halved. But it still estimates that up to one in six pubs – about 10,000 – has committed such an offence at some time, and that at any given time, one in 10 is breaking the law.Not only that, but the IFSP admits that it is only scratching the surface. In Britain there is evidence that independent restaurants are increasingly ‘tipping’. Nightclubs have largely gone unmonitored. And across the world the problem is just as big, with branches of the IFSP being set up in a range of European countries to address the problem.The cost to the whisky industry alone is estimated at £4 million, and that money is effectively being taken directly from the whisky drinker, who is paying above the odds for a vastly inferior whisky, and from the producers, who have been conned out of legitimate sales, and from the government, as much of the whisky is imported without duty being paid, or is smuggled by organised gangs.Competition and consumer minister Melanie Johnson says that the issue is causing increasing concern.“Spirits substitution is a significant problem,” she says.“Consumers are being cheated out of millions of pounds each year, and this is adding to the estimated £500 million the government loses each year to spirits smuggling and fraud. We need to continue to work together to eliminate this problem and ensure consumers are protected.”There are other problems, too. Trading Standards have discovered illicitly distilled spirits with an abnormally high level of methanol. The consequences can be illness, blindness and, as in one recent case, death.Whisky faces the biggest problem of all, because unlike other spirits, it can’t be detected at the outlet.Trading Standards officers use a testing kit for Bacardi, Smirnoff and Gordon’s based on a sugar enzyme placed in the products by the manufacturers. The enzyme reacts with litmus paper.Strict rules on the ingredients of Scotch whisky mean that no such test can be done. To uncover whisky substituting, another substituted spirit must be found, allowing whisky samples to be taken for analysis.It’s even possible that some of the more serious fraudsters know as much, and are leaving their vodkas and gins alone in the knowledge that they won’t get caught fiddling whisky.Trading Standards officers are keen to state that they have made big inroads into the problem in the British pub sector, but are under-resourced, and admit they have not even started to consider the problem elsewhere in the hospitality industry.“There is a problem with access when it comes to nightclubs,” said a spokesman. “And there is evidence that a significant number of independent restaurants have been tempted into this sort of fraud.”As for the whisky industry, testing remains a big problem. The Scotch Whisky Association is only too aware how serious the issue is, and points out that in the long run, the whisky drinker pays for the con.Although malts are much less affected – though not immune – the passing-off of blended whiskies deprives the industry of millions, and sales of blends are ultimately what keep malts in production.
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