Alcohol industry report documents dangerous increase in illicit alcohol trade due to prohibition

A report by Euromonitor International has documented the extraordinary growth of the illicit alcohol trade in 2020 as a direct consequence of the prohibition of alcohol sales.

The research report entitled, Illicit Trade: Alcoholic Drinks in South Africa in 2020, was jointly commissioned by the South African Liquor Brandowners Association (SALBA), the Beer Association of South Africa (BASA) and Vinpro.

The report indicated 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. For context, in volume terms illicit trade made up 1 in every 6,67 litres traded in 2017, and it has now escalated to 1 in every 4,54 litres traded.

Kurt Moore, CEO of SALBA, said, “This expansion of the illicit trade has had a devastating social impact on our citizens’ health and well-being, is stalling economic recovery and fuelling the engines of organised crime.”

Beer Association CEO Patricia Pillay said, “The report confirmed 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 tragic indirect consequence of this has been the rise in illicit homebrew consumption-related deaths and an increase in criminal activities, which are now firmly entrenched.”

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