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How HMRC Propose to Verify Scotch Whisky

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How HMRC Propose to Verify Scotch Whisky How HMRC propose to verify Scotch whisky Consultation document Publication date: 12 October 2012 Closing date for comments: 07 December 2012 Subject of this Scotch whisky is protected under EU legislation as a product consultation: of Geographical Indication (GI). To market a GI product in the EU requires it to be verified as compliant with the technical file for that product. The EU legislation requires the cost of verification to be borne by producers. This document outlines how HM Revenue and Customs (HMRC) propose to verify the GI of Scotch whisky and recover associated costs. Scope of this This consultation seeks comment from Scotch whisky consultation: producers involved in any of the five identified production processes (fermentation, distillation, maturation, blending and bottling/labelling). Comments are welcome on how HMRC propose to verify the GI of brands, recover associated costs and issue Certificates of Verification, intended to replace the current Certificates of Age. Who should HMRC welcomes input from any person, business or read this: representative body with an interest in the verification of the Scotch whisky GI, or who is involved in any of the five production process identified above. Duration: 12 October 2012 to 07 December 2012 Lead official: Sid Werrin, HMRC. How to Please respond, preferably by e-mail, to: respond or [email protected], or by post to: enquire Scotch Whisky Verification (Attention S Werrin), HM Revenue about this & Customs, Alcohol Policy (ECSM), 10th Floor, City Centre consultation: House, 30 Union Street, Birmingham, West Midlands, B2 4AD. Enquiries about the content or scope of this consultation, and requests for printed copies of the consultation document should be made using the contact details above, or by telephone to S Werrin on 0121 535 6762. After the HMRC will analyse and publish the results from the consultation: consultation as soon as practically possible after the consultation period, identifying any further actions planned or required as a result. Getting to GI verification of spirit drinks is a new initiative arising from EU this stage: legislation. Certificates of Verification are intended to replace the current Certificates of Age and Origin, which HMRC currently issue to facilitate the spirit drinks trade. Neither will be revenue raising. 2 Previous The Department for Environment, Food and Rural Affairs engagement: (Defra) hold the policy for GIs and with HMRC have developed the verification scheme proposed here. Previous engagement has been through the industry’s principal representative body, The Scotch Whisky Association (SWA). 3 Contents 1 Introduction and Background 2 Definition of Terms and Acronyms 3 Verification Scheme 4 Certificates of Verification 5 Costs of Verification 6 Impact Assessment 7 Summary of Consultation Questions 8 The Consultation Process: How to respond Annex A List of stakeholders Annex B Relevant (current) Government Legislation Annex C Verification Checks Annex D Certificate of Verification Annex E Scotch whisky Technical File Annex F Draft Spirit Drinks (Costs of Verification) Regulations Annex G Indicative Postal Costs On request this document can be produced in Welsh and alternate formats including large print, audio and Braille formats 4 1 Introduction 1.1 Scotch whisky is protected under EU legislation as a product of Geographical Indication (GI). This document outlines how HMRC propose to verify Scotch whisky. 1.2 HMRC’s role comprises two separate but inter-related services, to: verify products as compliant within the definitions of Scotch whisky (Chapter 3); and on request, issue Certificates of Verification (Chapter 4). In all cases the costs of these services shall be borne by the Scotch whisky industry. 1.3 HMRC propose to verify Scotch whisky produced in the UK by checking that the manufacturing processes are correctly set up to create products that comply with its definitions1. The scheme will require producers in the Scotch whisky industry to apply for verification before placing their product on the market. 1.4 Scotch whisky produced (blended and bottled/labelled) in other European Union (EU) Member States, or outside the EU to be marketed in the EU, must also be verified for compliance with its definitions. In such cases producers will be required to make their own arrangements directly with an appropriate product certification body assuring their processes are to the standard established by us. HMRC will require a copy of the assurance report and the certification provided. 1.5 HMRC will publish lists of production facilities with assured processes and verified brands. Once the scheme has been implemented, only products verified by HMRC can be marketed legally in the EU as Scotch whisky. Producers who do not have their processes verified cannot legally produce and market their product as Scotch whisky. 1.6 As part of implementing this verification regime it is proposed that the current 'Certificates of Age and Origin' and ‘Certificates of Authenticity’ are withdrawn, to be replaced by a new single 'Certificate of Verification'. 1 Refer to technical file, see Annex F. 5 Background 1.7 Regulation (EC) No 110/2008 (110/2008/EC) includes a provision for Member States to introduce measures ensuring that spirit drinks marketed with a protected GI2 are produced in accordance with the specific conditions laid down in a technical file for the product. In the UK, this primarily affects Scotch whisky but also affects Irish whiskey produced in Northern Ireland and Somerset cider brandy. 1.8 For the UK, the Spirit Drinks Regulations 2008 (SDR) give effect to 110/2008/EC, which includes provisions for the production, labelling and marketing of spirit drinks. The Scotch Whisky Regulations 2009 (SWR) impose stricter rules on the production, description, presentation and labelling than those contained in 110/2008/EC. The aim of these regulations is to further enhance the protection of Scotch whisky. 1.9 Verification of compliance with the technical file is carried out by a designated authority and HMRC have been designated this role for UK spirit drinks with a protected GI and will therefore make The Spirit Drinks (Costs of Verification) Regulations 201X to legislate for the Verification scheme. A draft of these regulations is appended at Annex F. 1.10 Access to verification records by HMRC staff will be limited to the information required to support their verification activity, as indicated in Annex C outlining the verification checks intended to be undertaken. 1.11 HMRC’s role is limited to verifying that products notified to comply with the technical file and publication of details of facilities with compliant production processes and verified brands. 1.12 Where a process is found to be non-compliant, HMRC will notify the producer and require remedial action to be taken. Failure to comply will result in enforcement action, see paragraph 3.27. Enforcement of non-compliance with the verification scheme has been designated to Trading Standards and Port Health Authorities. HMRC are able to pass relevant information to these designated enforcement authorities through established legal gateways. 1.13 Circumstances under which HMRC will not verify and publish details of facilities or brands will include where: notification is not given by producers of Scotch whisky that they should be included within the verification scheme; or an appropriate product certification body acting on a producers behalf are unable to establish compliance with the technical file 2 Geographical indications are a type of intellectual property. They are forms of identification which identify a product as originating in a region or locality in a particular country. The product’s reputation for quality or authenticity is intimately linked to its geographical origin. 6 HMRC are requested to exclude a brand by a relevant enforcement authority, considering evidence of failure / non-compliance in an assured process. 1.14 A draft verification scheme has been developed, the full costs of which will be borne by producers in the Scotch whisky industry, as required by 110/2008/EC. Your responses to the questions, summarised at Chapter 7, are welcome. 1.15 Details of how to respond are explained in Chapter 8. 7 2 Definition of Terms 2.1 This document uses terms that can have different meanings depending on context. For clarity, the terms below should always be associated with the accompanying definitions. Term Definition The owner of a production facility carrying out at least Producer one stage of the production of Scotch whisky. A person responsible for the operation of a production Operator facility. This can be a distillery manager, for example. Facility or A facility operating one or more production processes production facility required to create Scotch whisky. Process or One of five processes required to create Scotch whisky: production fermentation: distillation; maturation; blending; and process labelling of final product (bottling). The label name on a bottled product excluding ages, Brand descriptors and regions. A document that specifies the requirements of Scotch whisky. This includes requirements for production, Technical file description, presentation and labelling of Scotch whisky. The process of converting sugars into alcohol with the addition of yeast. This includes all stages of production Fermentation up to but not including the distillation process (including mashing of cereals). The process of acquiring spirit drinks using a fermented Distillation mixture. This includes all stages after fermentation up to the point where newly distilled spirit is obtained. The process of aging spirit to create Scotch whisky. This includes all processes from when newly distilled Maturation spirit is obtained up to but not including the point when casks are to be emptied for blending or vatting. This includes the filling of casks and tracking of ages. The process of combining two or more single whiskies to create a new whisky in one of three categories: Blending blended malt, blended grain or blended. This includes all processes from the emptying of casks to vatting, blending and diluting up to the point of bottling.
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