‘Illicit alcohol trade sales overtake entire combined wine and cider sectors’

The alcohol industry has shared worrying statistics of the impact of booze bans during Covid-19 lockdowns.

The South African Liquor Brandowners Association (SALBA), the Beer Association of South Africa (BASA), and Vinpro in a joint statement said there has been a “dangerous increase” in the illicit sale of alcohol due to the prohibitions.

Citing a research report by Euromonitor International which they help commissioned titled, Illicit Trade: Alcoholic Drinks in South Africa in 2020, they found that illicit alcohol trade has grown.” At a compound annual growth rate (CAGR) of 17% since 2017 and now stands at 12% of the R177.2 billion total industry market value,” the statement read.

CEO of SALBA, Kurt Moore said the growth in illicit trade is devasting and “is stalling economic recovery and fuelling the engines of organised crime.”

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Beer Association CEO, Patricia Pillay agreed, saying there was a clear correlation, “between the sales ban and the increase in the demand for illicit alcohol. The illicit trade market has almost doubled in the last three years and, in 2020, is now estimated to be worth R20.5 billion and comprises 22% of total alcohol consumption.”

The alcohol associations say their research shows booze bans have helped crime syndicates,” to ramp up smuggling and counterfeit operations to take advantage of the depressed legal market.”

According to the findings, the illicit alcohol trade sales by volume have overtaken the entire combined wine and cider sectors. In context they say is 665 431 hectolitres of alcohol equivalent vs 627 758 hectolitres of alcohol equivalent.

Rico Basson, managing director of Vinpro says the “rampant” illicit market has been aided by stringent regulations on the legal sale of alcohol since 2012, “including alcohol excise taxes that are almost double.”

Last year, Sars lost an estimated R11.3 billion due to the illicit alcohol trade. The associations reiterated that they do not support outright alcohol bans, concluding alternatives ways are available by working with government.

Complied by Sandisiwe Mbhele