Czech Customs Report Threefold Increase in Illicit Alcohol Seizures, Attributed to Inflation and Tax Changes

Czech customs officials have reported a significant surge in the confiscation of illegal alcohol during inspections, with the first eight months of this year witnessing three times the volume of illicit alcohol seized compared to the previous year. The increase in unmarked alcohol interceptions is thought to be driven by factors such as rising inflation, increased excise taxes, and efforts to evade international sanctions, raising concerns about public safety.

The confiscated unmarked alcohol has been discovered in a variety of locations, including vehicles and establishments like pubs, bars, and mixed goods shops. The common types of illegal alcohol include smuggled bottles lacking labels and liquor stored in containers without proper documentation. The rise in illicit alcohol interceptions has prompted action by the Czech customs administration to address the significant influx of unmarked alcohol into the Czech market.

Petr Müller, Director of the Supervision Department at the General Customs Directorate, explained that their efforts were based on multiple sources of information, including media reports highlighting the availability of unmarked alcoholic beverages. Müller noted that the illegal activities of sellers and traffickers of illicit alcohol are closely connected to changes in tax regulations, inflation, and anticipated price increases for hard liquor.

One of the contributing factors to the surge in illicit alcohol seizures is the current excise duty on ethanol, which stands at 32,250 Czech korunas per hectoliter. For a half-liter bottle of 40% alcohol, the excise duty amounts to 65 Czech korunas. Furthermore, a consolidation package designed to support the state budget includes a planned increase in the alcohol tax by one-tenth next year and a subsequent five percent annual increase over the following three years. This impending tax change has led to concerns raised by distillers, who have warned of complications, as wine, beer, and spirits are subject to varying levels of taxation.

Jakub Gottwald, Secretary of the Union of Distillers, explained that this situation is further strengthening the black market. The intensified inspections by Czech customs officers have primarily targeted smugglers, traders, as well as bar and restaurant owners and operators. Between January and the end of August this year, the customs administration confiscated nearly 8,500 liters of alcohol, with over 5,000 liters seized from personal vehicles and vans on the roads.

The South Moravia and Olomouc regions have reported the highest quantities of untaxed alcohol, with the primary transportation route being from Italy to Lithuania, often via vehicles with Bulgarian license plates. The accompanying documents for some shipments have indicated they were intended for Russian consumers, raising concerns about the evasion of international sanctions. However, the customs administration has also noted that tax regulations are frequently violated by individuals transporting liquor from private distilleries without the necessary permits, with some selling distillates intended for personal consumption.

To combat the trade of unmarked alcohol, customs officers have intensified inspections at various establishments, including markets, restaurants, bars, cafes, and shops selling mixed goods, where such beverages are frequently traded. These efforts have resulted in the discovery of over 500 liters of unmarked alcohol, with one Prague bar alone found to possess nearly 200 liters of such beverages stored in plastic containers.

In their determination to prevent a repetition of the methanol scandal that shook the Czech Republic in 2012 and resulted in 47 fatalities, customs officers now employ spectrometers during inspections to detect the presence of methanol in alcoholic beverages. As of now, no cases of methanol contamination have been confirmed.

The production of alcohol and other beverages containing ethanol is subject to a set of regulations encompassing laws related to business activities, alcohol, excise duties, and mandatory labeling. Each bottle of alcohol must feature a special control strip that is invalidated once the bottle is opened. Violations of these laws can result in penalties of up to five million Czech korunas.

The surge in illegal alcohol poses significant risks to public health and safety, and Czech customs authorities are committed to intensifying their efforts to address this growing problem. With the rise in confiscations and the identification of smuggling routes, they aim to curtail the illegal trade and protect consumers from potentially dangerous substances.

Article by Prague Forum

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