spiritNEWS July 2022

Countering Illicit Alcohol Trade Worldwide: Problems, Root Causes and Solutions

The World Spirits Alliance (WSA), which represents distillers and spirits producers from across the world at the international level, launched its Global Roadmap on Illicit Trade on 20 June 2022.  Presented at the occasion of WSA’s Annual Meeting in Geneva, the Roadmap, entitled “Countering Illicit Alcohol Trade Worldwide – Problems, Root Causes and Solutions” provides an overview of key drivers behind illicit alcohol trade and features a set of dedicated recommendations on how to tackle the issue in the future.

According to Euromonitor, up to 26% of alcohol consumed worldwide is estimated to be illicit, causing significant harm and damage as well as fiscal revenue losses of around USD 8.9 bn every year.

Illicit alcohol carries substantial risks and dangers. For consumers, illicit products can present significant health risks, for legitimate businesses, they present an unfair competition, and for governments, they represent massive fiscal revenue loss. So there’s a real need for the public and the private sectors to come together and work hand in hand to tackle the issue.

Illicit trade is typically spurred by high price differentials between legal and illicit products, an inadequate and overly restrictive legal framework, as well as a lack of enforcement and public awareness. Covid-related restrictions and prohibitions on the sale of alcohol are a case in point. A special chapter of the Roadmap examines how these restrictions boosted illicit markets and caused considerable damage and harm in countries such as South Africa and Mexico.

To avoid such setbacks in the future and ensure consistent progress in the fight against illicit trade, the Roadmap comes up with three key recommendations for action. Spirit producers across the globe call for support and improved framework conditions for legal alcohol and well as a stron,g political commitment to punish and prevent illicit trade through robust controls and enforcement. It is also important to inform and educate the population about the forms and dangers of illicit trade.

Through cooperation with enforcers, brand protection measures and technical innovation such as the use of ‘smart bottles, the global spirits sector is committed to playing an active and supportive role in the years ahead to fight against illicit trade. 

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