The Federation of Wholesale Distributors (FWD) has praised HM Customs and Revenue (HMRC) for its action this week on tackling suspected alcohol duty fraud, which is costing its members 40% losses on beer sales.

HMRC said its criminal investigators had uncovered a suspected £50 million excise duty and VAT fraud in dawn raids in the South East and Midlands on Wednesday. Twenty arrests were made following the raids on 12 commercial and 17 domestic premises.

FWD chief executive James Bielby said: “We are delighted to see HMRC taking positive action to prevent duty fraud. We have consistently called for a robust approach to this illegal trade which deprives the Treasury of revenue and our members of legitimate sales.”

He said the FWD had played a major role in encouraging HMRC to commit resources to this area of tax evasion. “We have made the case that given the scale of this fraud, it makes sound economic sense to invest in stamping it out even when public spending is being cut elsewhere, and I’m very pleased that our message has been heard.”

In October Chancellor George Osborne announced in the Spending Review that HMRC would invest £900 million in tackling tax avoidance, evasion, fraud and debt, with resources specifically designated to the prevention of tobacco and alcohol fraud.