Amid a growing illicit alcohol trade in South Africa, now worth about R25.1-billion, the Drinks Federation of South Africa (DF-SA) has called for urgent national cooperation to address the scale, economic impact and health risks of the illicit trade.

During the United for Good panel discussion, held on July 1, leaders from across the alcohol value chain discussed findings from the ‘Understanding the Illicit Alcohol Market in South Africa’ study – conducted by research firm Euromonitor International and commissioned by the DF-SA.

Findings in the study reveal that that nearly one in five alcoholic drinks sold in the country is illicit, noting that the industry is responsible for an estimated fiscal loss of R16.5-billion a year.

The study indicates that counterfeiting rather than smuggling now dominates the illicit trade, particularly in spirits.

The main drivers of the growth in illicit trade have been linked to issues of affordability, accessibility, scale of operation and weak enforcement.

During the discussion, Euromonitor research consultant Benjamin Rideout described illicit alcohol as any alcohol that does not comply with local laws, which includes counterfeits, smuggling and tax leakage.

He explained that illicit alcohol now accounts for 18% of total alcohol volume sales domestically.

He noted that illicit alcohol volumes have increased by 55% since 2017.

“Things have changed. Based on our research and evidence that we found from our store visits, we know that volumes are the highest they've ever been,” he said, warning that illicit alcohol can be found in both informal and formal channels.

During the discussion, panellists, including National Consumer Commission (NCC) acting commissioner Hardin Ratshisusu, law firm Adams and Adams partner Jan-Harm Swanepoel and DF-SA chairperson and South African Breweries (SAB) CEO Richard Rivett-Carnac, emphasised the need for coordinated efforts among government, business and enforcement agencies to tackle this issue.

During the discussion, DF-SA research head Dr Shamal Vinesh Ramesa noted that test results conducted with the University of KwaZulu-Natal had revealed the presence of harmful chemicals such as methanol in many illegal products.

He warned that consuming methanol can lead to serious health risks, such as metabolic disorders and, in some instances, death.

“The illicit alcohol market is not merely an economic challenge; it's also a public health emergency. It's a threat to legitimate enterprise and it also is an erosion of trust in both institutes and the rule of law,” he said.

Hence, the study authors argue that a multidisciplinary approach, greater enforcement, frequent testing and stronger public awareness are keys to tackling issue of illicit alcohol in South Africa, highlighting the importance of adopting concerted efforts in this regard.

“This is a highly organised, multibillion-rand economy operating in the shadows, fuelled by affordability, accessibility and a lack of accountability. We can no longer tackle this in silos. It will take a coordinated cross sector action to dismantle these networks and protect our people,” Ramesa continued.

Meanwhile, the DF-SA also announced a new national awareness campaign to help South Africans recognise illegal alcohol and understand the risks. The campaign will include tools for traders and consumers, tips on spotting fake products, and information on how to report them.

This forms part of the DF-SA’s United for Good initiative – a commitment to tackling shared challenges through facts, cooperation and leadership, so that South Africans can access safe, regulated products.

“This isn’t just about trade, it’s about protecting people from fake and unsafe products. Consumers have the right to know what they’re buying.

“Tackling this issue takes teamwork – through better information-sharing, stronger partnerships, and public education. We welcome the DF-SA’s leadership in pushing for a united national response,” added Ratshisusu in a media release.