`Bootleg trade' shops face Lottery ban

CORNER SHOPS and newsagents are to be banned from selling National Lottery tickets if they are found guilty of selling smuggled alcohol or tobacco.

Camelot has agreed with the Government to impose a voluntary ban on small shopkeepers trading in cigarettes or alcohol smuggled from the Continent, as part of a crackdown to be announced today by Customs and Excise. Retailers who are convicted of selling or distributing illicit alcohol or tobacco will lose their lottery terminal.

The Chancellor announced measures to combat smuggling in his spring Budget, but the Treasury is increasingly alarmed at the continued rise in smuggling. Alcohol and tobacco worth pounds 140m was seized in the year to April 1999, compared with pounds 76m during the previous year.

Lottery ticket sales are an important money spinner for small retailers, who jealously guard their advantage. The threat of stores losing their terminals is expected to prove a powerful weapon against organised smuggling, which often includes intimidation of shopkeepers.

The average convenience store could lose at least pounds 7,500 a year in commission on lottery sales, for which they can claim 5p for every pounds 1 ticket sold. They would also lose earnings from other purchases by lottery ticket- buying customers.

Traders' leaders said they could not condone illegal action by retailers selling smuggled cigarettes and spirits, but they also said that the move raised suspicions that it could help Camelot to fulfil its commitment to allow Post Office outlets to take a 20 per cent stake in selling lottery tickets.

"It could earn Brownie points for Camelot with the long-term review of the lottery operation going on," said one industry source.

There is also concern that the crackdown will hit small traders while ignoring the disparity in tobacco and alcohol duties between Britain and other European nations, which has provided the incentive for organised gangs to smuggle goods from the Continent.

John Branscombe, the director of security for Camelot, said: "By working with HM Customs and Excise on this initiative, we are helping to safeguard the livelihoods of the vast majority of shopkeepers who are not involved in selling smuggled products."

Succumbing to the temptation to deal in smuggled goods was "just not acceptable", said Trevor Dixon, the chief executive of the Association of Convenience Stores. "There is a very small minority of retailers who knowingly peddle black market goods, and the more commercial pressure that they are put under the greater the opportunities for the legitimate retailers we represent who wish to retail alcohol and tobacco in a socially responsible manner."

However, he added: "The root of the problems caused by smuggling is the financial incentive for criminals to illegally trade in products where duty rates are so much lower abroad than they are in this country."