Illicit Alcohol in South Africa poses a growing threat to communities, the economy, and public health.
What do we mean by “Illicit”
Illicit alcohol is:
- Produced illegally, outside licensed and regulated facilities.
- Made without meeting quality and safety standards, putting consumers at serious risk.
- Often well-known brands that are counterfeited or smuggled in from other countries, bypassing local excise duties.
- Hiding in plain sight, found more and more in licensed outlets
- Homebrews become illicit when they are sold to consumers but not if made for cultural practices
Illicit alcohol enters the market through counterfeit, smuggling, and unregulated local production – often using increasingly sophisticated methods to evade oversight.
The cost of illicit alcohol
The scale of the problem is staggering. According to a 2025 Euromonitor study:
- Illicit alcohol now makes up nearly 18% of South Africa’s total market by volume (Hectolitres of Absolute Alcohol HL LAE).
- Volumes have surged by 55% since 2017 (HL LAE).
- The South African Revenue Service lost an estimated R16.5 billion in excise duties (excluding VAT) in 2024 alone.
Breaking down this fiscal loss:
- 38% is counterfeit, costing the economy R6,27 billion.
- 29% is smuggled, costing R4,8 billion
- 32% tax leakage from unregulated local production equals R5,3 billion in losses.
This is money that should be funding hospitals, schools, pensions, and social services. Instead, it fuels criminal networks and deprives the country of vital resources.
The human toll
The financial losses are only one part of the crisis. Counterfeit alcohol often contains toxic, unregulated substances such as methanol – which can cause blindness, organ failure, or death.
The harsh reality is that South Africans are fully aware of the dangers posed by counterfeit alcohol but still opt to purchase it anyway because of the lucrative price points:
- 83% of surveyed consumers are worried about the health risks of illicit alcohol.
- 67% of surveyed consumers believe that those who buy illicit products want lower prices irrespective of their origin.
- 49% of surveyed consumers claim to know someone personally harmed by illicit alcohol.
- Of the above 49%, 29% know someone who has died as a result consuming illicit alcohol.
Illicit alcohol is not a victimless crime – it destroys families and communities.
Why is it spreading?
The growth of illicit alcohol is driven by three main factors:
- Affordability – illicit alcohol is, on average, 37% cheaper than legal alternatives.
- Accessibility – the scale and sophistication of these operations have grown immensely, and illicit alcohol is now found in both the formal and informal markets in South Africa.
- Weak enforcement and policy gaps – counterfeit and smuggled products often slip through the cracks, allowing illegal operators to thrive.
A call for collective action
Illicit alcohol undermines every legitimate player in the industry. No category is untouched. That’s why alignment is critical.
The Beer Association of South Africa, together with the Drinks Federation of South Africa and South African Liquor Brand Owners Association, is calling for:
- Stronger enforcement, to shut down criminal networks.
- Clear, coordinated messaging, so that consumers, government, and stakeholders understand the risks and scale of the problem.
- Consideration of the existence of illicit alternatives as part of policy decision-making and implementation. It’s about balancing regulation with practicality – ensuring policies reduce harm and protect revenue, instead of fuelling the black market.
