OPINION | Illicit booze trade a budding public health disaster

There is a widespread misconception about the nature of the illicit alcohol trade that exposes consumers to potentially serious health risks.

While the common belief is that illicit alcohol is found mainly in the informal trade, especially unlicensed shebeens, the reality is different.

The overwhelming majority of illicit alcohol queries are in legal, licensed businesses and the criminal syndicates behind this trade have become increasingly sophisticated, with their own large-scale production, warehousing and distribution capabilities operating in plain sight.

The illicit products on offer range from sachets and 100ml plastic bottles of spirits to high-quality counterfeits of well-known fast-moving brands in vodka, brandy, whisky and gin which are hard to spot to the untrained eye.

Often the only giveaway is a price that is too good to be true. Given that 53% of the retail selling price of the average bottle of legal spirits goes to taxes, the minimum break-even price for a 750ml bottle of vodka, brandy or whisky ranges from R124 to R134, yet these products have been found for sale in legal bottle stores for as little as R80. As this is less than the minimum tax that should have been paid, it’s clear this can only be an illicit product whose supplier has not paid their fair share of tax.

On average, illicit alcohol prices were estimated at 43% below licit prices in 2020.

While hard-pressed consumers may be thrilled to find such a bargain, it is a bargain with the devil that comes with serious potential health risks. Illicit producers have no responsibility towards consumers and the ingredients used and hygiene standards maintained, if any, are an unknown entity.

A relatively recent phenomenon and a growing concern is the increase in sales of sachets and 100ml plastic bottles for spirit products. Sachets and 100ml pack sizes are prohibited in terms of the Liquor Products Act and the Trade Metrology Act, more specifically the South African National Standards (SANS) 289 which sets strict regulations on the volume declaration and packaging requirements for liquor products.

These 100ml spirits are being sold for as little as R14 each and the sachets for even less and they are widely available in mainstream franchise retail stores that should know better.

This makes spirits with an alcohol content of up to 43% very affordable, which is a public health disaster in the making happening in plain view.

The illicit alcohol market not only poses a public health risk to consumers but also leads to significant fiscal revenue losses for the government.

The wide availability of illicit alcohol during the Covid-19 alcohol bans created a flourishing market, during which illicit alcohol was the only product available.

They now have a stranglehold on the alcohol trade in many rural communities with secret warehouses and manufacturing sites fronted by a chain of legal, licensed bottle stores that they own and operate, giving them total control of the supply chain.

There is a direct link between these syndicates and the gangs, extortion rackets and illicit financial flows keeping SA on the Financial Action Task Force grey list.

Our law enforcement authorities are not only woefully under-resourced to deal with this problem at scale, but they also lack the training to identify, investigate and prosecute such complex crimes successfully. The siloed approach between departments such as excise and Sars where the belief is that raising prices in the legal market does not impact the illicit trade and that it is instead an administration issue, also gives criminals the gap.

Multidisciplinary task teams should be established to combat the highly sophisticated criminal networks flourishing behind illicit trade.

• Maroga is the corporate affairs director at HEINEKEN Beverages