The illicit alcohol trade in South Africa costs the economy billions each year while putting public health at serious risk. Image: SAPS shared via X @SAPoliceService.
(The Post News)– South Africa’s economy is under significant strain due to the illicit alcohol trade, which costs not only billions in lost tax revenue but also poses serious health risks to the public.
According to a recent report by Euromonitor titled Understanding the Illicit Alcohol Market in South Africa, this underground industry is valued at around R25 billion and accounts for nearly one in every five alcoholic beverages consumed in the country.
The report reveals that illicit alcohol makes up approximately 18% of total consumption, resulting in an estimated R16.5 billion loss to the government annually. Factors such as weak law enforcement, widespread economic hardship, and addiction fuel this booming black market.
Illicit alcohol consists of a range of products, from counterfeit brands to untaxed or illegally traded stock. Euromonitor researcher Benjamin Rideout warns that the problem goes beyond lost revenue; the market is flooded with potentially dangerous homemade or industrial concoctions that threaten consumer safety and undermine confidence in the beverage industry.
Dr. Shamal Ramesar of the Drinks Federation of South Africa, a trade organization representing South Africa’s beverage industry, highlighted the severe health dangers posed by these illicit products. Dr. Ramesar explained that chemicals detected in examined samples of illegal liquor have been related to major health problems, including death.
Despite these risks, the study shows that 83% of consumers remain unaware of the health hazards associated with counterfeit alcohol. Nearly half of respondents know someone who has suffered harm from illicit products, and the trade also creates unfair competition for legitimate businesses.
Richard Rivett-Carnac, CEO of South African Breweries, points to a significant price disparity of up to 30% between legal and illicit products. According to Rivett-Carnac, the demand for illegal alcohol, which avoids taxes and regulations, is fueled by this price disparity as well as the financial strains that many customers experience.
Meanwhile, Hardin Ratshisusu from the National Consumer Commission has urged shoppers to report fake alcohol products and encourages retailers to raise awareness. Ratshisusu noted that combating the detrimental consequences of illegal alcohol on public health and the economy needs collaboration from customers, companies, and authorities.
As South Africa grapples with this challenge, stronger law enforcement, public education, and community involvement remain crucial to curbing the illicit alcohol trade and protecting both consumers and the economy.
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