40 Percent of Alcohol Consumed in Africa is Illicit

Of the nearly 10.7 million hectolitres of pure alcohol (hl lae) consumed each year in Africa, 40.0 percent is illicit.

The illicit alcohol trade generates US$5.1 billion in annual sales revenue for illicit players and represents a combined annual financial loss of more than US$1.8 billion for the governments involved.

According to a global study on illicit alcohol by a Global market research company Euromonitor International, alcoholic beverage is deeply ingrained in most societies worldwide, with global consumption in 2017 generating US$1.6 trillion in legally registered sales1 of 222.8 million hectolitres of pure alcohol.

The multi-region report compiled findings from 24 countries in Africa, Eastern Europe, and Latin America and the results showed that 26 percent of the total volume of alcohol consumed in these countries is illicit.

However, despite the efforts of policy-makers, law enforcement officials, and legitimate alcohol manufacturers, illicit alcoholic beverages still account for a significant share of the total volume of alcohol consumed in many countries.

Of the 42.3 million hl lae of total alcohol consumed each year, approximately 25.8% is illicit. In other words, nearly 10.9 million hl lae of illicit alcohol is consumed annually in these 24 countries alone.

The illicit alcohol markets in Africa are more similar among them than the markets in Latin America. Illicit artisanal alcohol (locally referred to as illicit homebrew) is a regional mainstay, accounting for 42.6 percent of the region’s illicit alcohol volume in lae terms and emerging as the largest category.

Whether distilled or fermented, illicit artisanal alcohol is widespread: Although it is particularly prevalent in rural and low-income areas, it is consumed across all income levels.

Illicit alcohol has the highest presence in Mozambique since it has the highest share of illicit alcohol from the total alcohol consumption in volume (73.0 percent) while South Africa has the smallest (14.5 percent).

In total, 42.3 million hectolitres of pure alcohol (hl lae) are consumed each year across the 24 countries under review. Illicit alcoholic beverages account for 25.8 percent of this volume and generate more than US$19.4 billion in sales. The average person in these countries consumes 5.9 lae of alcohol each year, and 1.5 lae of that is illicit. The illicit beverages that consumers drink are most likely to be counterfeit/unregistered brands and illicit artisanal beverages, although this differs significantly by geography.

Across regions, consumers drink more illicit distilled spirits than illicit fermented beverages such as beer or wine. This is true even when fermented alcoholic beverages are more popular in the overall market.

Distilled spirits are more common in the illicit market because spirits have higher alcohol content and tend to be more expensive, providing an even greater incentive for those who sell illicit spirits to increase their profits.

There is also a greater incentive for price-conscious consumers, who have fewer inexpensive licit options when purchasing spirits.

Beer accounts for 52.9 percent of licit alcohol consumed (lae) globally, however it only represents 10.2 percent of the global illicit alcohol consumption (lae). Overall, beer is the least likely type of drink to be illicit, being 2.3 percent of the total (licit and illicit) alcohol consumption

Illicit players worldwide take advantage of underregulated or weakly controlled distribution channels to buy raw ingredients as ethanol and to reach consumers. The distribution landscape has become increasingly complex because of globalization and technological developments.