To ask the Chancellor of the Exchequer what research his Department has (a) commissioned and (b) evaluated on the prevalence of alcohol diversion fraud; and whether he has plans to take steps to reduce the incidence of such fraud.

Diversion of alcohol without payment of excise duty is the most prevalent form of alcohol fraud. Estimates of tax losses are produced by HM Revenue and Customs (HMRC) annually for spirits, the latest of which are published in 'Measuring Tax Gaps-2009'. This publication is available in the House of Commons Library. Reliable estimates for wine and beer are not yet available.

In Budget 2009, the Chancellor announced a comprehensive programme of work for 2009-10 involving HMRC and UK Border Agency renewing their strategy to tackle alcohol fraud. The strategy comprises measures to prevent fraud as well as tackle evasion and criminality, and has three broad themes:

Changing the law-to make life tougher for criminals and easier for honest businesses;

Working with honest businesses-to secure legitimate supply chains and make it harder for criminals to source alcohol; and

Strengthening operational response-to co-ordinate efforts to detect, disrupt and dismantle organised criminal networks and illicit supply chains.

HMRC is currently in the process of implementing this strategy.