Criminal Liability in Regulatory Contexts Responses - Law ...

THE SCALE OF THE PROBLEM
1.321 Owing to the success of Scotch Whisky (see the introductory paragraph), there is
unfortunately very widespread counterfeiting of Scotch Whisky, and other forms
of unfair competition against Scotch Whisky worldwide. At any one time the SWA
may be involved in 70 legal actions in courts worldwide, numerous administrative
complaints and hundreds of investigations which may lead to enforcement
action. What we cannot know is what percentage of fake Scotch Whiskies we
are managing to identify, i.e. how many counterfeits are missed. Even in cases
which the SWA brings, it is frequently not possible to find out the number of
infringing bottles which are sold. However, when the SWA last estimated the
volume of imitation ‘Scotch Whisky’, which was the subject of legal actions by the
SWA over a two year period, in the cases where quantities were known, they
amounted to over 107 million bottles. It is therefore evident that fraudulent use of
the GI Scotch Whisky is depriving Scotch Whisky producers and the UK economy
of significant amounts of earnings. Weak controls on the misuse of the GI Scotch
Whisky will simply encourage fraudulent operators and result in further lost sales,
and indeed damage the reputation of Scotch Whisky, which will impact on future
sales.
1.322 While it is the case that the majority of the SWA's protection work takes place
abroad, both in the EU and in third countries, significant problems have also
arisen from time to time in the UK, as the following examples illustrate -
GLENCARNIE and LOWLAND GLEN
1.323 In 2000 the SWA learnt of the distribution in the UK through 'bootleg' channels of
the brands LOWLAND GLEN and GLENCARNIE. The brands were traced to a
French company which proved to be the manufacturer. Documents recovered in
a raid on that company indicated that it had sold nearly 2.5 million bottles of these
products over a 2 year period to the UK through several UK distributors. The
products in question were neither whisky nor Scotch Whisky, a fact of which the
UK distributors were well aware. Under the enforcement measures proposed for
the Scotch Whisky Regulations before the introduction of criminal sanctions, the
UK distributors could only have been served with an improvement notice.
Provided they complied, they would have pocketed the profits without any further
penalty, notwithstanding the scale of the deception of consumers and the
damage done to the reputation of Scotch Whisky.
RED BIRD
1.324 In 2002 UK Customs seized a shipment of RED BIRD “Scotch Whisky”,
containing several thousand bottles, being imported into the UK at Dover. A
further seizure was later made at Newhaven. Analysis indicated that the contents
were neither whisky nor Scotch Whisky.
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