Latin America’s illicit alcohol trade worth $2bn

13th May, 2014 by Lauren Eads

Latin America’s $2.4 billion illegal alcohol market accounted for more than a quarter of the region’s total alcohol sales in 2012, costing the legal trade $736 million.

alcoholic-drinksAccording to a special report by Euromonitor, the trade in illegal alcohol in Colombia, Ecuador, El Salvador, Honduras, Panama and Peru accounted for 25.5% of the region’s total market by volume in 2012, 14.1% by value, representing a loss of US$736 million dollars to the legal trade.

Retail prices of illegal products were found on average to be 30.3% lower than their legal counterparts, with the report noting that many consumers were unaware as to whether the product they were purchasing was legal.

Euromonitor analysts said: “As counterfeit refills have very similar pricing to legal brands, many consumers do not realize that the product they are purchasing is not original.  Some formal channels such as wholesalers, retailers and on premise outlets sell illegal alcoholic beverages alongside legal products, further misleading consumers.

“However, there has been increased consumer awareness thanks to campaign efforts and local news about illegal alcohol.”

Uncontrolled residual ethanol volumes, price gaps and weak law enforcement were cited as key drivers of the illegal market with government regulations concerning legal alcohol sales and consumption also blamed for indirectly creating more opportunities for the illegal market.

Peru was found to have the largest illegal alcohol market with a 30.8% share of the total market in volume and 15.9% in value terms, with its growth blamed on a lack of control over the trading and use of ethanol.

Ecuador followed with its illegal alcohol trade holding a 28.6% share of the country’s total market in volume and 22.2% in value.

Report analysts said recent tax increases on imported alcoholic beverages had caused the sale of legal imports to fall giving rise to the illegal sale of alcohol.

Colombia and El Salvador came a close third and fourth each holding a 23.6% and 23.5% share of the total market by volume and 12.1% and 15.5% by value respectively.

In Honduras the illegal alcohol market accounted for 13.1% of the total market in volume and 3.6% in value, with the report noting that the country’s government had “no clear plan to reduce or control the size of the illegal market and made very little effort to do so in 2012”.

Panama was found to have the smallest illegal alcohol market which accounted for 2.4% of the total market in volume and 2.8% in value in 2012.

The report said programs implemented by customs in Panama had helped increase the seizure of illegal alcohol, while its government was also taking measures to regulate the sale of ethanol to prevent the production of illegal alcohol in the country.

Leave a Reply

Your email address will not be published. Required fields are marked *

Please note that comments are subject to our posting guidelines in accordance with the Defamation Act 2013. Posts containing swear words, discrimination, offensive language and libellous or defamatory comments will not be approved.

Subscribe to our newsletters

2 x Buying Assistants

Berry Bros. & Rudd
Battersea and Basingstoke, UK

Temporary Christmas Sales Support - Wines & Spirits

Harrods
Knighsbridge, London, UK

Head of Wholesale

Hispamerchants Ltd
London, UK

Sales Manager

Hispamerchants Ltd
London, UK

National Sales Manager

Maverick Drinks
Field based, UK

Regional Sales Executive

EWGA
Gloucestershire, UK

Senior Content Writer

Rude Wines
Ledbury, UK

Events and Trips Manager

Berkmann Wine Cellars
London, UK

Sales Account Manager - On-Trade

Berkmann Wine Cellars
East Scotland, UK

Account Manager Central London

Speciality Drinks Ltd
London, UK

The World Bulk Wine Exhibition

Amsterdam,Netherlands
20th Nov 2017

The Drinks Business Green Awards 2017

London,United Kingdom
20th Nov 2017

The Global Spirits Masters Lunch

London,United Kingdom
1st Dec 2017
Click to view more

Green Awards 2017

Deadline : 25th October 2017

The Global Riesling Masters 2017

Deadline : 30th October 2017

Click to view more

Champagne Masters 2017

The only Champagne blind tasting in the UK, the competition will reward the best wines in the following categories:

The Global Rosé Masters 2017

With wines from the palest of pink to almost ruby red, bone dry to almost cloyingly sweet, reductively handled to barrel-aged, as well as gently spritzy to fully sparkling.

Click to view more