The Drinks Federation of South Africa (DF-SA) has issued a strong call for closer collaboration between government and the private sector to tackle the alarming rise in illicit alcohol trade. According to new research by Euromonitor, the illicit alcohol market in South Africa surged by 55% in volume between 2017 and 2024, a compound annual growth rate of 6%, outpacing that of the legal alcohol sector. The report estimates the illicit market’s current value at R25.1 billion, resulting in an estimated R16.5 billion loss to government tax revenue.
This urgent issue was the centre of discussion in a recent panel hosted by DF-SA. Representatives from the National Consumer Commission, Euromonitor, and legal firm Adams & Adams joined the forum to unpack the findings and explore joint solutions to combat the growth of the illicit trade.
Chairperson of DF-SA and CEO of South African Breweries (SAB), Richard Rivett-Carnac, emphasised the gravity of the situation: “Illegal alcohol is a growing threat to South Africa’s economy and public health. It drains billions from public funds, threatens jobs, and weakens the formal legal, taxed alcohol industry. Understanding the drivers of illicit alcohol growth and its magnitude is a step in the right direction, but we need stronger collaboration with the industry and Government to start removing the incentives that allow for the illicit market to thrive and intensifying enforcement.”
Further insights from Dr Shamal Ramesar, DF-SA’s head of research, painted a concerning picture of public risk and economic damage. He noted that recent product testing with the University of KwaZulu-Natal uncovered dangerous substances like methanol in many illicit beverages.
“Communities are at risk, and the economy is the biggest loser when we delve into the pervasiveness of illicit alcohol… Unless we shut down illegal producers and educate consumers, lives will continue to be at risk.”
On behalf of the National Consumer Commission, acting commissioner Hardin Ratshisusu reiterated the need to protect consumers from unsafe and counterfeit 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 DF-SA’s leadership in pushing for a united national response.”
Benjamin Rideout, research consultant at Euromonitor, underlined that nearly one in five alcoholic drinks sold in South Africa is now illegal, making this a large-scale problem.
“Unlike some countries where homebrews are the issue, South Africa is facing large-scale counterfeiting. The situation demands better control over production inputs like ethanol and much stronger enforcement.”
From a legal standpoint, Jan-Harm Swanepoel, partner at Adams & Adams, characterised the illicit alcohol trade as: “Essentially organised crime, which we have the legal tools to fight, but what is now needed is alignment and action.”
In a show of unity and determination, the discussion ended with a Pledge of Commitment. All panellists signed on to support a multi-stakeholder initiative focusing on awareness, information-sharing, and coordinated enforcement. DF-SA also announced the launch of a national awareness campaign aimed at helping South Africans recognise and report fake alcohol products. The initiative, part of DF-SA’s “United for Good” programme, will equip both traders and consumers with practical tools and knowledge to stay safe and make informed choices.
Closing the event, Rivett-Carnac highlighted the economic drivers behind the illicit market:
“Illicit alcohol distorts the market and undermines trust in legitimate brands. In a tough macroeconomic environment, consumers are looking for bang for buck, affordable goods, and the price gap of between 37% and 70% between illicit and legal alcohol makes illicit products more appealing, especially in low-income communities. 67% of surveyed consumers in the Euromonitor study, for instance, said they would knowingly buy illicit alcohol due to the lower price.”
He concluded with a call to level the playing field: “While legal producers operate within a stringent regulatory framework, complying with tax, safety, and advertising laws, illegal operators face nowhere near the same level of scrutiny. As regulations on the legal industry continue to evolve, the lack of equivalent enforcement on illicit players creates an uneven playing field. We’re committed to driving momentum on this issue because addressing it is critical for the long-term sustainability and integrity of the alcohol industry.”
PERSONAL FINANCE
