Illegal alcohol sales through webshop evaded Finnish duties whilst undercutting legitimate retailers

Finnish customs officials have exposed a massive German alcohol tax fraud operation. The scheme cost the state nearly €40 million in lost revenue over two and a half years.

Two German men and a Finnish-born woman face charges of aggravated tax fraud and serious alcohol-related offences. Finnish Customs reported the illegal alcohol sales scheme on Friday.

€40 Million Tax Evasion Scheme

The investigation revealed that a German company illegally sold alcohol to Finnish consumers. The firm did not pay required taxes to the Finnish state. The company evaded nearly 40 million euros in excise duties and value-added taxes between January 2019 and August 2021.

Chief investigator Juha Havumäki explained the impact of the illegal alcohol sales operation. The company gained “a very significant criminal benefit and a significant competitive advantage over others operating legally in the same market.”

Online Sales Network

The scheme operated primarily through the company’s webshop. Alcohol products were delivered directly to private addresses in Finland. This method of illegal alcohol sales allowed the criminals to bypass Finnish tax collection systems entirely.

According to the preliminary investigation, a significant portion of sales targeted Finland. The illegal alcohol sales network also delivered to other Nordic countries and within Germany itself.

Market Impact

The German alcohol tax fraud case highlights how criminal enterprises can undermine legitimate alcohol retailers. Finland maintains some of the European Union’s steepest alcohol taxes. This makes illegal alcohol sales particularly profitable for tax evaders.

The investigation comes as many Finnish consumers continue seeking cheaper alcohol alternatives. Some travel to neighbouring Estonia for lower-priced drinks. However, this German alcohol tax fraud scheme brought untaxed alcohol directly to consumers’ doors. This made the illegal option more convenient than legal cross-border shopping.

The case demonstrates the ongoing challenges authorities face in preventing illegal alcohol sales. These schemes exploit tax differences between EU member states whilst undermining legitimate businesses that comply with local regulations.

Source: yle