If you're a UK brewery, distillery or drinks brand selling online, FHDS approval at your fulfilment house isn't optional — it's the legal baseline. This guide explains exactly what FHDS is, why it matters, what it requires and how to make sure your 3PL is genuinely approved before you move your stock in.
What is FHDS?
FHDS stands for the Fulfilment House Due Diligence Scheme. It is an HMRC-administered registration scheme that requires any UK business acting as a fulfilment house for overseas sellers to register, carry out due diligence checks and maintain detailed records.
In practical terms: if a warehouse picks, packs and despatches goods on behalf of businesses — particularly businesses not established in the UK — that warehouse needs FHDS approval. For alcohol specifically, FHDS approval is the legal baseline for any 3PL storing and fulfilling alcohol orders on behalf of drinks brands in the UK.
FHDS was introduced under the Finance Act 2016 and came into full force in 2018. It was designed primarily to tackle VAT fraud in the eCommerce sector, where overseas sellers were using UK fulfilment centres to sell goods without paying the correct UK VAT.
Why does FHDS matter for UK drinks brands?
Even if you are a UK-based brewery, distillery or drinks brand, FHDS approval at your fulfilment house matters for several reasons:
Legal compliance: using a non-FHDS-registered warehouse to fulfil alcohol orders puts your brand at risk of being associated with non-compliant supply chain practices. HMRC takes a dim view of brands whose fulfilment houses cannot demonstrate proper due diligence.
Marketplace requirements: major marketplaces and retail partners are increasingly asking brands to confirm that their 3PL holds appropriate licensing. FHDS approval is becoming a standard expectation from retail buyers and marketplace compliance teams.
Stock security: FHDS-approved warehouses are required to maintain detailed records of all stock movements. This gives you a full audit trail from receipt to despatch — invaluable for excise duty compliance and inventory management.
Age verification: FHDS-approved fulfilment houses work with carriers who offer Challenge 25 age-verification on delivery. Without this, alcohol brands risk delivering to under-18s — a serious legal and reputational risk.
What does FHDS registration actually require?
For a warehouse to achieve and maintain FHDS approval, it must:
- Register with HMRC via the Government Gateway and receive a formal FHDS registration number
- Carry out due diligence checks on all overseas sellers they work with — verifying VAT registration, identity and compliance status
- Maintain detailed stock records covering every unit received, stored, fulfilled and returned
- Report non-compliant sellers to HMRC within 30 days of discovering an issue
- Renew registration annually and comply with HMRC inspections
This is a significant administrative and compliance burden — which is why many smaller warehouses choose not to pursue FHDS approval. If a 3PL you're considering cannot provide their FHDS registration number on request, they are not approved and cannot legally fulfil alcohol on your behalf.
How to check if your 3PL is FHDS approved
HMRC maintains a public register of FHDS-approved fulfilment houses. You can search this register at gov.uk to verify any warehouse's approval status. Always ask your 3PL for their registration number and cross-reference it against the HMRC register before committing to a fulfilment relationship.
Red flags to watch for:
- A 3PL who says they handle alcohol but cannot provide an FHDS number
- Vague answers when you ask about compliance and record-keeping
- No mention of age-verification delivery options
- No clear audit trail process for stock movements
FHDS and spirits storage — what you need to know
Spirits, wines and beers have specific storage requirements beyond FHDS. While FHDS covers the compliance and due diligence side, the physical storage of alcohol products requires appropriate conditions:
- Temperature: spirits and wine should be stored away from direct sunlight and extreme temperature variations. Consistent cool, dry conditions protect product quality.
- Security: alcohol is high-value stock. CCTV, access control and adequate security measures should be in place.
- Separation: alcohol stock should be stored separately from other product categories, particularly food items with strong odours.
- FIFO picking: first-in, first-out stock rotation is particularly important for wines and time-sensitive products with best-before considerations.
How Reilly's FHDS-licensed alcohol fulfilment works
Reilly's Express Delivery holds full FHDS approval from HMRC. Our Lutterworth warehouse is set up specifically to handle UK drinks brands — from craft gin startups fulfilling 50 D2C orders a month through to established spirits brands shipping thousands of units across multiple channels.
Here's how our alcohol fulfilment operates:
Onboarding: we walk through FHDS compliance requirements with you at onboarding. Your products, volumes and channels are reviewed and your DespatchLab account is set up to connect your Shopify, Amazon, TikTok Shop or wholesale ordering systems.
Stock receipt: your alcohol stock is received at Lutterworth, quality checked and logged into DespatchLab. Every unit is tracked from the moment it arrives.
Order fulfilment: orders from every channel flow into one pick queue. Each order is picked, packed and despatched same day (where received before cut-off) via carriers with age-verification delivery options.
Record keeping: full stock movement records maintained as required under FHDS. Available for HMRC inspection and for your own audit purposes at any time.
Returns: returned alcohol stock received, inspected and restocked or quarantined as appropriate. Full returns reporting via DespatchLab.
No minimum order volumes. No long-term contracts. Transparent pricing with a quote within 24 hours. If you're a UK brewery, distillery, wine merchant or drinks brand looking for FHDS-licensed 3PL fulfilment, visit our alcohol fulfilment page or call 0116 444 0444 to discuss your requirements.