Illegal alcohol trade fuels criminal networks, weakens the economy, and puts compliant businesses at risk – often without being immediately visible.
Know what’s legal. Understand the impact. Support responsible trade.
Illicit alcohol is alcohol that is produced, imported, distributed, or sold illegally and does not follow South African laws and regulations on tax, licensing, packaging, labelling, production or safety standards.
Counterfeit alcohol, by contrast, refers to fake alcohol products that are produced and traded illegally. These products are deliberately manufactured, refilled, or relabelled to imitate legitimate brands and deceive consumers, but they are produced entirely outside the regulated system, including refilling genuine bottles with unauthorised liquid and using fake closures, bottles, packaging, labels, or branding. Because these products are not authentic and lack quality control, traceability, and oversight, they bypass the regulated supply chain and cannot be assumed to be safe for consumption, posing significant health and safety risks.
When people hear the term “illicit alcohol”, they often think only of counterfeit products. In reality, illicit alcohol includes a much wider range of illegal activities, from smuggling and tax evasion to unlicensed production and the sale of counterfeit alcohol. Some illicit products may look identical to legitimate brands, while others operate entirely outside the regulated system. Understanding the different forms of illicit alcohol helps consumers, retailers, and policymakers recognise the scale of the problem and its impact on lawful trade, public revenue, and consumer confidence.
Illicit alcohol = legitimate alcohol traded illegally, as well as counterfeit alcohol, unregulated self-made alcohol, and alcohol linked to tax fraud.
Counterfeit alcohol = fake alcohol, produced and traded illegally
It is important to note that not all illicit alcohol is counterfeit, but all counterfeit alcohol is illicit. Both forms undermine lawful trade and public trust, but counterfeit alcohol poses additional health and safety risks due to its deceptive and unregulated nature.
Illicit alcohol refers to any alcoholic drink that is made, sold, moved or distributed outside South Africa’s legal system. While it may appear similar to, or even identical to, legitimate products, it has bypassed the rules that ensure fair competition, proper taxation, and regulatory oversight. Not all illicit alcohol is counterfeit alcohol, but all counterfeit alcohol is illicit.
Illicit alcohol is illegal alcohol. It avoids paying required taxes and duties and often skips licensing, labelling, and compliance checks that support lawful trade.
Counterfeit and Unregistered Brands (31%)
Counterfeit or unregistered alcohol brands are alcohol products that are either fake imitations of legitimate brands or unknown brands sold outside the legal and regulatory system.
Counterfeit alcohol brands are fake versions of real, trusted brands that are made to deceive consumers. Counterfeit alcohol accounts for 5.58% of the total volume of illicit alcohol in the South African market.
Unregistered alcohol brands are brands that are not officially approved, recorded, or compliant with the legal requirements for sale. They may not be fake copies of another brand, but they still operate outside the formal legal system.
This is the largest illicit category by volume in 2024, accounting for 31% of the illicit market, 39% by value, and 38% of total fiscal loss. The category value almost doubled from R4.9 billion in 2017 to R9.8 billion in 2024, and is mainly driven by illicit spirits.
This matters because counterfeit alcohol can look genuine, sit next to trusted brands, and enter the market at low prices, making it harder to detect and easier to distribute. It is also the part of the illicit market that presents the clearest direct health risks to consumers, because there is no assurance of what the bottle actually contains.
Alcohol Trafficking (23%)
This means the illegal movement or trade of alcohol. It includes alcohol that is smuggled across borders, diverted from legal supply chains, stolen or hijacked in transit, round-tripped, or sold through illegal retail environments to avoid tax and regulation.
In 2024, it accounted for 23% of illicit volume, 30% of illicit value, and 29% of fiscal loss. Alcohol trafficking was especially prominent during the pandemic, reaching 31% of illicit volume in 2020, before falling back to 23% in 2024.
This category is important for border officials, SARS, SAPS, and transport enforcement because the product may carry original branding yet still be moving illegally and evading duties.
Round-Tripping / Diversion
Legitimate alcohol that crosses borders or is diverted into the market without the required duties being paid.
Hijacked or Stolen Products
Legitimate alcohol that is stolen and reintroduced into the market without tax compliance.
Tax Fraud (25%)
This is the deliberate evasion or underpayment of legally required excise duties on alcohol through false, incomplete or undeclared production or sales reporting. It can include under-reporting production, not declaring production at all, misclassifying products to pay a lower tax, falsifying records to reduce excise owed, or the incorrect usage of excise bond systems.
In 2024, it made up 25% of illicit volume, 10% of illicit value, and 32% of fiscal loss. That means it is not always the most visible category on the shelf, but it is one of the biggest drains on the fiscus.
For SARS, inspectors and regulators, this category is critical because the product may appear legal at first glance, but the fraud lies in the paperwork, classification, or declaration.
Unregulated Self-Made Alcohol (21%)
This means small-scale, hand-made alcohol that is produced or sold without meeting legal rules or official standards. It includes alcohol made and sold outside the formal licensed system, not properly inspected or certified, and that may not comply with tax, safety, labelling, or production requirements. This excludes alcohol made or brewed for traditional and cultural ceremonies.
In 2024, it accounted for 21% of illicit volume, but only 22% of illicit value and just 1% of fiscal loss. So while it remains part of the illicit market, its fiscal impact is much smaller than counterfeit products, trafficking, or excise fraud.
This category is important because it often operates in informal settings and may sit closer to community-level trade, where visibility is lower and compliance checks are harder.
Surrogate (non-beverage) Alcohol
These are products that contain alcohol, which are not meant to be consumed as beverages, yet are consumed as substitutes for drinking alcohol. Examples can include certain medicinal products or denatured alcohol used in cleaning products and industrial products.
The definitions matter here because not every alcohol-containing product is intended for safe human consumption. That creates a serious public health risk.
Illicit alcohol is estimated to be worth approximately R25 billion per year, costing South Africa about R16.5 billion in lost tax revenue in 2024 alone.
18% of all alcohol sold in South Africa is illicit. Illicit alcohol volumes grew by 55% from 2017 (498 290 HL LAE) to 2024 (773 424 HL LAE).
Spirits account for nearly two-thirds of the illicit market, with products such as vodka, gin, cane spirits, and whisky frequently targeted due to their ease of diversion, refilling, and counterfeiting.
Beyond direct tax losses, illicit alcohol creates long-term economic inefficiencies. Illegal supply chains operate outside regulatory oversight, distort pricing signals, and divert demand away from compliant producers and retailers. Over time, this undermines market stability and confidence in South Africa’s regulatory environment.
Illicit alcohol is not limited to street corners or informal outlets — it can surface across the entire market.
Research identifies three main routes:
Counterfeit or tax-leaked stock entering through unverified distributors.
Unlicensed sales and home-produced alcohol, particularly where enforcement is weak.
Digital platforms and small shipments used to bypass controls.
Illicit operators actively exploit gaps in enforcement, price pressures, and high-demand channels. No single channel is immune – vigilance across the supply chain is essential.
Illicit alcohol affects the entire economy and society, not just the alcohol sector.
Counterfeit and Illicit Alcohol Fuel Criminal Networks
Illicit and counterfeit alcohol are not victimless offences. These activities form part of wider criminal economies, with profits often reinvested into organised crime such as smuggling, fraud, and other illegal operations. As illicit trade expands, enforcement costs rise and public resources are further strained.
It Undermines Investment and Business Confidence
High levels of illicit trade weaken confidence in governance and market fairness. When licensing systems, taxation, and intellectual property protections are routinely bypassed, investment declines and innovation slows.
Jobs and Legitimate Businesses Are Displaced
Illicit alcohol undercuts compliant businesses by avoiding regulatory, labour, and tax costs. This unfair competition reduces lawful sales, places pressure on jobs across the value chain, and weakens the formal economy.
Less Public Revenue for Essential Services
Excise and VAT revenue fund infrastructure, education, healthcare, law enforcement, and community services. Illicit trade erodes this revenue base, shifting the burden onto compliant taxpayers and businesses.
Risk to Health
A key concern associated with counterfeit spirits, unregistered brands, and unregulated self-made alcohol, is the potential health risk to consumers. Because these products are produced outside regulated manufacturing systems, their ingredients, alcohol content, and safety standards cannot be guaranteed. In some cases, these products have been found to contain harmful substances such as methanol or other industrial chemicals, which can pose serious health risks if consumed.
Counterfeiting is not limited to one category of alcohol. Spirits such as gin, whiskey, and vodka, are commonly targeted, but wine and beer can also be affected. This means that consumers may unknowingly purchase products that appear legitimate but have not been produced, tested, or distributed through lawful and regulated channels.
The risks extend beyond consumers. Counterfeit alcohol is often produced in unsafe and unregulated environments, which may place the people involved in its manufacture, handling, and distribution at risk as well. This reinforces the importance of protecting legitimate supply chains, supporting responsible trading, and helping consumers identify and avoid illicit products.
Click here to view risk to health as listed on the Alliance Against Counterfeit Spirits website.
Recognising legitimate alcohol starts with looking for the right indicators:
Unusually low prices are often a strong indicator of illicit trade. Alcohol sold significantly below the expected retail price may suggest unpaid excise duties, tax evasion, counterfeit production, or illegal diversion.
For example, government taxes alone — including excise duty and VAT — on a standard 750ml bottle of spirits now exceeds R100 per bottle before retail costs, distribution, and profit margins are added. Any alcohol sold under or close to this price range is probably illicit.
Responsible purchasing decisions help protect consumers, support compliant businesses, and contribute to a safer and more transparent market.
Protect Your Business
Retailers and traders play a critical role in protecting the integrity of South Africa’s alcohol market. Illicit trade exposes businesses to significant legal, financial, and reputational risks, while also undermining consumer confidence and fair competition within the sector.
Businesses found trading in illicit alcohol may face serious consequences, including:
Maintaining strong compliance practices protects not only individual businesses but also consumers, legitimate industry participants, and the broader economy.
What To Do If You Suspect Illicit Alcohol
If you suspect that an alcohol product may be illicit:
Timely information sharing between consumers, retailers, industry bodies, regulators, and law enforcement agencies is essential in identifying and disrupting illicit supply chains and protecting public safety.
The Drinks Federation South Africa (DF-SA) is committed to supporting efforts to combat the manufacture, distribution, and sale of illicit and counterfeit alcohol in South Africa.
If you have information relating to suspected:
You are encouraged to report it confidentially
Email: illicit@drinksfederationsa.co.za
To assist with the assessment and referral of suspected illicit alcohol activities, please provide as much detail as possible when submitting a report. Useful information may include:
Providing detailed and accurate information can assist relevant authorities and industry bodies in identifying trends, assessing risks, and supporting appropriate enforcement action.
Reports may be submitted anonymously.
DF-SA does not conduct law enforcement activities but may, where appropriate and lawful, share relevant information with the relevant competent authorities.
All information received is handled in accordance with applicable legislation, including the Protection of Personal Information Act (POPIA).
Please complete the following form.
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Reports relating to suspected criminal activity may also be made directly to:
South African Police Service (SAPS) Crime Stop
Every report helps close the gaps that allow illicit alcohol to circulate within communities and legitimate markets.