Two men from Derbyshire have been jailed for their part in an illicit alcohol operation which saw them evade duty and taxes of around £1m.

The duty-free alcohol should have been exported to France and Belgium but never left the UK.

Instead, Tarsem Mandair and Rickpal Bhathal diverted the goods to storage units in Derby where they were sold on to retail outlets at “cut prices”.

 “This was a major operation which would have continued to deprive the public and the economy of vital funds had we not stopped it,” said Gary Lampon, assistant director of Criminal Investigation for HM Revenue and Customs (HMRC).

“The pair built up a massive enterprise which infiltrated the retail sector in Derbyshire. It funded lifestyles which would otherwise have been well beyond their means and they are now paying the price for their crime with the loss of liberty.”

Thousands of litres of Glen’s and Smirnoff vodka, wine and beer were seized by HMRC officers in January and September 2011 from three storage units in Derby, rented by the gang using false company names.

Counterfeit “duty paid” labels on bottles of Glen’s and sheets of counterfeit labels for High Commissioner whisky were also seized.

Both pleaded guilty to charges of conspiracy to deal in alcoholic drinks on which duty had not been paid, and possession of criminal property, namely cash, under the Proceeds of Crime Act. The pair were given six months in jail each.