Bulgaria strip stamp change threatens premium spirits, spiritsEUROPE warns


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Photo:Jacqueline Sinclair/Flickr
Photo:Jacqueline Sinclair/Flickr

Related tags Scotch whisky Economics

spiritsEUROPE revealed today that it has written to the Bulgarian Finance Minister asking him to delay a duty strip stamp change, which it warns could cost premium spirits producers.

Bulgarian excise revenues on spirits have historically fallen well below expectations, as native producers fail to declare production levels accurately, while homemade spirits have entered commercial channels illegally.

The government response in 2004, 2007, 2009 was to change the strip stamp regime – the rationale being that this protected revenues more effectively.

Strip stamp changes ‘failed on every occasion’ to resolve difficulties – spiritsEUROPE

“This failed on every occasion to resolve the difficulty, but the changes in strip stamp regime have created great difficulties, and costs, for the spirits sector,”​ spiritsEUROPE said today.

“On each occasion, importers had to enter into negotiations with customs officials over the treatment of stock bearing old stamps,”​ it adds.

Instead of a “sensible”​ transition period to permit stock to be sold via normal trade channels until it had been exhausted, the trade body said the Bulgarian government insisted on the return of goods to warehouses for new stamps.

But spiritsEUROPE described this as a complicated and expensive process, with some companies not refunded the initial tax paid for over two years.

“Last but not least, whenever the strip stamp regime changed, the availability of counterfeit stamps (very similar to the genuine version) was immediate, boosting the non-commercial alcohol market with associated health risks to consumers,”​ spiritsEUROPE said.

Slower-moving spirits at risk

The trade federation said today that it recently wrote to the Bulgarian Finance Minister regarding the excise strip stamps transition period, which is due to end on December 31 2014.

“There are still spirits in market/trade channels bearing ‘old’ strip stamps that, according to the current legislation, would have to be confiscated and/or destroyed when the transition period ends,”​ spiritsEUROPE said today.

“Any such products still on the market would be high value, therefore usually slower-moving spirits such as premium single-malt Scotch whiskies,” ​it added.

“Our request to the finance minister is very clear. Existing products bearing the ‘old’ strip stamp should be allowed to remain on the market until stocks are exhausted.”

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