The government has taken a giant step towards stamping out alcohol duty fraud by bringing in a registration scheme for wholesalers.

In his autumn statement, chancellor George Osborne said the government will tackle tax evasion and illicit trading by criminal gangs and fraudsters via the scheme, and increase HM Revenue and Customs powers to remove illegal alcohol from the market.

The Federation of Wholesale Distributors said the move would return the 9% of beer and 6% of wine currently sold illegally in the UK to the legitimate supply chain.

The trade in duty-avoided beers, wines and spirits is currently costing taxpayers £1.2bn per year in lost revenues and has damaged the profits of legitimate wholesalers.

Now retailers will risk losing their licences if they buy from non-registered wholesalers, and must take “reasonable steps” to make sure their drinks suppliers are legitimate.