1. 10/10/2015 1 Counterfeits: Bad for business, exchequers and health... Paul Skehan, spiritsEUROPE

2. Who are we? 2

3. A Spirit of Growth… ● 46 product categories, including a host of geographically-specific regional products, e.g. Scotch, Cognac, Polish Vodka… ● First agri-food export sector in EU ● 37.5 million of hectoliters of spirits drinks produced each year of which 26 million are sold in the EU through retailers and the HORECA sector ● Large contributor to national exchequers across Europe 3

4. Export revenues for Europe… €10,002,548,035 (or €19,000 per minute…!) 4

5. Agri exports: A real European success story 10/10/20155

6. Where do we sell? Top 10 Export Markets 10/10/20156

7. What is the problem? ● Illicit spirits trade ► Undermines financial viability of the sector ► Denies revenues to hard-pressed exchequers ► Can threaten health and lives of consumers ● Fragmentation of effort ► Multiple players, efforts, not aggregated ● Lack of joined-up, global response ► Lack of awareness about extent of problem ► Culturally sensitive in some countries – definition of problem ► Difficulties in assessing scale ● First a case study from Latvia, then some other figures 10/10/20157

16. More generally… ● UK: Each year Revenue & Customs calculates the estimated loss of tax on excise goods through criminal activity. For year 2011-2012: ● Lithuania: Surrogates being classified as cosmetics, not subject to alcohol regulation constitute 7% of alcohol turnover according to LANA. ● Poland: A project carried out in 2012 by the Polish Spirits Industry in partnership with the Ministry of Finance and others showed that the loss of direct tax revenues represents approximately €281 million annually. ● South Africa: In 2012, the spirit sector estimates (for spirits alone) an annual loss for the government of about €50 million. 10/10/201516

17. What is the solution? ● Need to understand the problem ► Agree a taxonomy (work in progress) 10/10/201517

19. What is the solution? ● Need to understand the problem ● Need to measure the problem in a consistent, comparable way ► Industry, COM, JRC… others? ► Agree minimum basic characteristics (to make comparable) 10/10/201519

20. What is the solution? ● Need to understand the problem ● Need to measure the problem in a consistent, comparable way ● Need global response – political, enforcement, industry ► Interpol, Europol, WCO, OECD, BASCAP … who leads? 10/10/201520

21. Thank you! 10/10/201521