Pocketful of Stones scammed out of 4,800 bottles of gin in shocking supermarket fraud

In 2020, Pocketful of Stones, a spirits distillery in the UK, entered into a deal with a French supermarket chain to supply 4,800 bottles of gin. The sale, which amounted to approximately £150,000 at retail prices, was ultimately unsuccessful as the entire consignment went missing after being dispatched to a warehouse in France, leaving the distillery without payment. This incident occurred against the backdrop of the UK still being part of the EU Customs Union, which imposed specific requirements for the movement of goods subject to duty. The regulations mandated that either the seller or purchaser must provide a financial guarantee to HM Revenue and Customs (HMRC) to address potential duties during the time the goods were in transit. Following the disappearance of the gin, Pocketful of Stones found itself in a complex legal situation involving HMRC. The distillery contended that the rules surrounding excise duty were unclear during the tumultuous period leading up to Brexit, which created confusion regarding their responsibilities. They argued that they should not be liable for the duty payment since they had not received any payment for the dispatched goods and maintained that they had 'reasonable excuse' for their failure to pay. However, HMRC's position was that the duty became due once the gin had left the distillery’s premises, regardless of whether the product reached the buyer. In their appeal to a Tax Tribunal, the distillery emphasized that they were unfairly held responsible due to the scammers’ fraudulent activities and suggested that HMRC did not conduct enough of an investigation into the crime. Judge Vimal Tilakapala presided over the case and ultimately dismissed the appeal, ruling in favor of HMRC’s interpretation of the law. The judge noted that the duty was applicable upon the gin leaving the distillery and pointed out the failure of Pocketful of Stones to properly designate the buyer’s responsibility by not completing the necessary forms. As a consequence of this ruling, the distillery was left facing a bill of £38,000 from HMRC for the excise duties owed, effectively compounding their losses from the original scam. This court ruling and the events leading up to it exposed the vulnerabilities faced by small businesses in navigating the regulatory landscape during uncertain economic and political times. Pocketful of Stones remains a recognized name in the craft spirits market, having won multiple awards and expanded its operations with a bar and shop, yet they now grapple with the fallout from this fraudulent incident and the ruling against them in court.