Illicit alcohol is a big problem in South Africa and unfortunately, we lead the way on the continent as well.
In SA there are many cultural brews, but illicit alcohol has a very clear definition - “alcohol that is not intended for human consumption, illegally produced homemade alcohol and store-bought alcohol that is consumed in a highly criminalized way.”
Global market research company Euromonitor International launched a global study on illicit alcohol.
The multi-region report compiles findings from 24 countries in Africa, Eastern Europe and Latin America. Results show that 26 percent of the total volume of alcohol consumed in these countries is illicit.
Out of the 25 countries covered by Euromonitor’s research, Africa has the largest illicit alcohol problem. Whilst almost double the number of countries were covered in South America, Africans consume double the volumes (in absolute alcohol terms) of illicit alcohol.
Key points on illicit alcohol in Sub-Saharan Africa
- South Africa witnessed the largest fiscal loss out of the 7 African countries due to illicit trade despite the low share of illicit to licit litres of absolute alcohol (LAE) volume predominantly due to its tax strategies.
- In international standards and even by African standards, South Africans consume excessive amounts of alcohol. The country has the second highest per capita alcohol consumption, falling just behind Zambia.
- South Africa has the largest variance between the price that consumers can purchase legal alcohol vs what they pay for illicit alcohol (51%) and it is well above the regional average of 42%.
- In 5 of the 8 countries covered the share of the illicit alcohol market is more than 50%, which means that 1 in every two 2 alcoholic beverages consumed, are illicit.
- In Zambia, this number is much higher. At 69.5% percent, Zambia is second only to Mozambique and almost 3 out of every 4 alcohol drinks are illicit.
- Measured on a per capita basis, Zambians drink the largest amount of legal alcohol but also drink the most illegal alcohol.
- Whilst smuggling is present across all the countries researched, Zambia loses by far the most of its tax revenue to smuggling (71%).
* Euromonitor International is a market research provider.