Illicit alcohol costs South African govt £1.4bn

Illegal alcohol sales cost the South African government an estimated R2.5 billion (approximately £1.4bn) in unpaid excise taxes in its 2013 financial year.

Illegal alcohol cost the South African economy billions of Rands last year in unpaid tax

According to reports by Business Day, tax hikes on alcohol could have been an “incentive to engage in illicit activities”, including counterfeit products, contraband, home-brewing and legal domestic alcohol that does not attract production on taxes.

According to Euromonitor, this sector of the market contributes 23% of the legal alcohol market in terms of volume and the biggest contributor to the illegal market was cheap, home-brewed concoctions, which are not permitted to be sold to the general public without the required licences.

In addition, a report by the World Health Organisation released earlier this year detailed “unrecorded alcohol” consumption in South Africa among people aged 15 years and older increased from an average of 2.5 litres per year between 2003 and 2005 to 2.9 litres between 2008 and 2010.

The 16% increase, was more than double that for recorded alcohol consumption, which on average was 7.2%.

The spirits industry has been plagued with illicit alcohol problems for years, with a reported 14,000 litres of illegal booze seized in Mumbai earlier this year in just a month.

Last year, more than 40 people were killed in India as a result of consuming toxic bootleg alcohol.