Table of Contents
What is an AWRS license
The benefits of being granted an AWRS license
The process to get an AWRS license
The way forward
What is an AWRS license?
The Alcohol Wholesaler Registration Scheme (AWRS) is a regulatory initiative by HM Revenue & Customs (HMRC) aimed at combating alcohol duty fraud in the UK only. Introduced following the 2013 Autumn Statement, the scheme mandates that businesses selling or arranging the sale of duty paid alcoholic products to other businesses must be approved by HMRC. Alcohol duty fraud, often involving the sale of illicit alcohol, costs the UK government significant revenue annually. AWRS seeks to mitigate this by ensuring that only legitimate businesses operate within the alcohol wholesale market, thereby protecting the supply chain from fraudulent activities.
Businesses are required to register for AWRS if they:
- Sell or arrange the sale of alcoholic products to other businesses in the UK.
- Conduct sales at or after the point where excise duty becomes payable.
- Supply alcohol to other businesses for onward sale or supply.
This encompasses a range of entities, including breweries, wine producers, distilleries, cider producers (unless exempt under specific relief schemes), wine importers, general wholesalers, brokers, auctioneers, and certain retailers and non-profit organizations involved in alcohol sales to other businesses.
The scheme places obligations on Trade Buyers, as these businesses that purchase alcohol for resale must ensure their suppliers are AWRS approved. This involves checking the supplier's AWRS Unique Reference Number (URN) through HMRC's online lookup service. Failing to verify a supplier's approval status can result in penalties for the buyer.
Engaging in wholesale alcohol activities without AWRS approval, or purchasing from unapproved wholesalers, constitutes a contravention of the scheme. Such violations can lead to civil penalties, and in some cases, criminal prosecution. HMRC assesses penalties based on the nature and severity of the contravention.
More information can be found within the below links. These resources provide in-depth information designed to help businesses navigate the requirements of the AWRS and ensure compliance with UK alcohol wholesale regulations.
- Excise Notice 2002: Alcohol Wholesaler Registration Scheme
- Check if you need approval to sell alcoholic products to another business
The benefits of being granted an AWRS license
Having an Alcohol Wholesaler Registration Scheme (AWRS) license offers several key benefits to a UK distillery:
1. Legitimacy and Market Access
Legal compliance: Being AWRS approved is a legal requirement for selling or arranging the sale of duty-paid alcohol to other businesses in the UK.
Business credibility: Registration enhances the distillery’s credibility and professionalism, making it a more attractive partner for retailers and trade buyers who are legally obligated to source alcohol from approved wholesalers.
2. Increased Sales Opportunities
Access to B2B markets: An AWRS license allows the distillery to sell directly to pubs, bars, restaurants, shops, and other wholesalers.
Export readiness: Having a regulated and transparent business framework helps build trust with international partners and supports future export plans.
3. Supply Chain Confidence
Reassurance to buyers: Trade customers are more confident buying from an AWRS registered distillery, knowing the business is vetted by HMRC and deemed "fit and proper."
Partnership potential: Larger retailers and distributors may require AWRS registration before engaging in business, opening doors to new partnerships.
4. Competitive Advantage
Stand out from unregistered operators: Operating within a fully compliant legal framework differentiates a distillery from less scrupulous competitors.
Protection from penalties: Avoids the risk of fines or enforcement action that could result from non-compliance or unknowingly working with unregistered entities.
5. Contributes to Industry Integrity
Supports fair trading: Participation in AWRS helps combat alcohol fraud and creates a level playing field by keeping illicit traders out of the supply chain.
Builds sector reputation: Being part of a compliant network strengthens the overall reputation of the UK alcohol industry.
The process to get an AWRS license
Prospective wholesalers must apply for AWRS approval at least 45 days before commencing trading. The application involves demonstrating that the business is "fit and proper," which includes providing detailed information about business operations, directors, and suppliers. Applicants must wait for HMRC approval before starting to trade as operating without approval can lead to penalties.
The way forward
The due diligence and compliance checks mandated within the AWRS framework are enhanced and improved as the UK spirits market evolves. The local first, UK focus approach by Swan Knight Distillery also continues to support this changing market. On the Swan Knight Distillery web site, there is a list of stockists and a contact form for anyone wishing to apply to be a stockist.