Drinks Federation Research Uncovers Alarming Growth Of Illicit Alcohol Trade Impacting South Africa

Dr Shamal Vinesh Ramesar, Head of Research at the Drinks Federation of South Africa (DF-SA). Image supplied

The rise of illicit alcohol in South Africa is not just an industry concern — it is a national crisis with deep implications for public health and economic growth.

New research commissioned by the Drinks Federation of South Africa (DF-SA) and conducted by Euromonitor International reveals a surge in the illicit market that threatens to undermine both public health and the economy.

Since 2017, the volume of illicit alcohol has grown by a staggering 55%, reaching 773,000 hectolitres of litres of absolute alcohol equivalent (HL LAE) in 2024. That’s equivalent to nearly one in every five alcoholic drinks sold.

The illicit market now commands an estimated value of R25.1bn — up from R20.5bn in 2020. But the costs are not only counted in rands and cents: illicit alcohol evaded an estimated R16.5 billion in VAT and excise tax in 2024 alone — revenue that could have gone to healthcare, education, and infrastructure.

More than an economic threat

Counterfeit alcohol is not just untaxed — it’s unregulated, untested, and unsafe. These products often lack health warnings, ignore basic safety standards, and are produced in facilities that fall far short of compliance and hygiene norms.

In some cases, they contain dangerous levels of ethanol or toxic additives like methanol, posing serious risks to consumers.

A recent national survey of 707 South African adults reveals the extent of concern:

• 83% worry about the health risks of illicit alcohol
• 49% know someone who has been harmed by it
• 29% know someone who has died from it

  This is not a theoretical problem. These are real people, real families, and real tragedies.

  The value of the legal market

  The legal alcohol industry operates within a regulated framework that prioritises product safety, quality assurance, and compliance with national standards. Legal producers are subject to oversight and controls that ensure traceability, testing, and the inclusion of appropriate health warnings and responsible consumption messaging.

  This industry contributes to the formal economy through tax compliance, employment, and support for businesses across the value chain. It generates revenue through VAT and excise duties, which help fund public services, and provides economic opportunities through regulated production, distribution, and retail channels.

  Notably, the legal sector promotes responsible drinking through education campaigns, compliance training for traders, and self-regulation in marketing practices. When consumers choose legal alcohol products, they are not only protecting their health — they are supporting an ecosystem that values safety, responsibility, and development.

  What needs to be done

  The DF-SA’s research confirms that enforcement alone is not enough.

  A sustainable response to the illicit alcohol market must include the following priorities:

• Promote responsible, legal trade through public awareness and support for formalised businesses
• Disrupt illegal supply chains with stronger enforcement and inter-agency coordination
• Empower informed choices through education, public awareness campaigns, and community outreach

  This is not just about curbing the black market — it’s about building a more informed and resilient trading environment that protects consumers and supports compliance.

  A shared responsibility

  Illicit alcohol is not an isolated issue — it affects us all. It puts consumers at risk, undermines legitimate businesses, drains public resources, and erodes trust in institutions.

  Addressing it requires more than policy — it demands coordinated, collective action.

  Now is the moment for government, SARS, SAPS, industry, civil society, and communities to stand together with a shared purpose: to protect lives and uphold the rule of law. No single sector can solve this alone — but together, we can drive meaningful change.

  The Drinks Federation of South Africa is ready to work with partners across society to turn this research into action. By aligning efforts, closing enforcement gaps, and raising public awareness, we can strengthen legal trade and help ensure South Africans can access safe, regulated products they can trust.