Around 250 Customs officers, aided by police, raided 38 premises including cash and carry outlets, bonded warehouses and private addresses across London in yesterday's raids. More than a dozen people were arrested.
Officials believe the drink, marked for tax-free export only, was in fact destined to be sold on the domestic market without taxes having been paid. The potential loss in duties to the Inland Revenue is estimated at more than pounds 100m.
Yesterday's operation, codenamed Fluke, was the culmination of a two- month-long surveillance exercise. Some of the police officers involved in the raids are believed to have been armed.
The alleged fraud involved drink being purchased from legitimate producers and stored in bonded warehouses. Documents were then falsified to indicate it had been exported. In fact, the goods were being shifted around a succession of warehouses before being distributed to outlets across the capital. The drink was then sold on at normal prices without any duty being paid by the distributors.
David Heathcoat-Amery MP, Paymaster General and the minister responsible for Customs, said: "This successful operation underlines our determination to crack down on those carrying out such frauds against not only the taxpayer but also legitimate businesses."
A Customs and Excise spokesman said: "This is probably the first case of its kind. To do this you need a large organisation. It can't be done by small-time amateurs or bootleggers." Sixteen people were being questioned last night as a result of the raids which began at 5am yesterday.Reuse content