Research
OECD (2022), Illicit Trade in High-Risk Sectors: Implications of Illicit Alcohol for Public Health and Criminal Networks, Illicit Trade, OECD Publishing, Paris, https://doi.org/10.1787/1334c634-en.
The Illicit trade of alcohol is a global phenomenon. A recent report compiled by the OECD addresses the significant challenges posed by illicit trade in the alcohol industry, which is an attractive target for organized crime due to its large market and potential for high profits with relatively low investment.
Illicit alcoholic beverages take various forms, including counterfeit goods, smuggled/contraband items, illicit artisanal beverages, tax leakage, and non-conforming products not intended for human consumption.
Illicit alcohol accounted for about 25% of global alcohol consumption in 2018, with a disproportionate impact on lower-income countries. The OECD report emphasizes the link between the low affordability of legitimate products and the incentives for counterfeiters, as governments impose additional taxes on alcohol for public health reasons.
Infiltrating legitimate supply chains is a challenge for large-volume illicit traders, and the role of e-commerce in distribution is growing. Organized crime’s involvement in illicit alcohol trade is a concern, as it funds other illegal activities and undermines the rule of law. The COVID-19 pandemic has provided opportunities for illicit traders to expand their operations, highlighting the need for enhanced cooperation among countries and collaboration with the private sector.
Illicit trade in alcohol has negative socio-economic impacts, posing health risks, depriving governments of tax revenue, damaging the reputation of legitimate businesses, and supporting organized crime. Various stakeholders, including INTERPOL, Europol, the World Custom Organisation, and industry representatives, have been involved in efforts to combat illicit trade in the alcohol sector at national and international levels.
Research
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The alcohol value equation: a net positive effect on South African society