Just in the past three months, alcohol companies and their trade groups have deployed claims of booming illicit alcohol markets in at least ten countries – almost always as governments weighed alcohol taxes or limits on sales. The figures come from studies the industry pays for, now covering at least 30 countries. Independent evidence tells a different story.
In late August, the head of Uganda’s alcohol industry association used a newspaper column to put pressure on the government. “Regulation should not unintentionally push consumers towards unsafe alternatives by making legitimate products inaccessible,” wrote Emmanuel Njuki in The Independent. Less than two weeks earlier, the government had ordered bars to open only after 3pm on working days. Njuki chairs the Uganda Alcohol Industry Association and is head of legal and corporate affairs at Nile Breweries, the Ugandan subsidiary of AB InBev.
The same message appeared within weeks in Kenya, South Africa, Nigeria, Zambia, Mexico, Brazil, Sri Lanka and the Philippines. The script rarely changes. A large, precise figure for the share of alcohol that is illicit. A claim that taxes or regulation will push people towards it. A call for enforcement and “predictable” taxes instead of policies that make alcohol less affordable and less available.
In almost every case, these claims appeared as governments were reviewing alcohol taxes, preparing budgets or introducing other forms of evidence based alcohol policies.
TEN Countries, One Script
In South Africa, National Treasury is reviewing alcohol excise taxes. The Beer Association of South Africa – whose members are Heineken Beverages, South African Breweries (SAB, owned by AB InBev) and United National Breweries – claims the proposals would raise tax on most beers by around 20%. SAB, Heineken and the beer association all pushed the illicit trade message, citing a Euromonitor International study commissioned by the Drinks Federation of South Africa. The federation was founded by Diageo, Heineken, Pernod Ricard, SAB and DGB, and its board is chaired by SAB’s chief executive. Heineken told BusinessDay that the inflation-only excise increase in the 2026 budget “was an appropriate response in the current socioeconomic context”. At a Treasury workshop on the proposals in late August, Jeff Hardy of the Transnational Alliance to Combat Illicit Trade (TRACIT) told officials that “Price is the most significant driver of illicit consumption.”
In Nigeria, the Spirits and Wines Association of Nigeria – whose members include Diageo, Pernod Ricard, Bacardi, Moët Hennessy and Heineken’s Nigerian Breweries – spread a claim through July and August that counterfeit and smuggled products make up about 40% of wines and spirits sold in the country. In Zambia, the Zambia Association of Manufacturers told a pre-budget meeting that illicit trade makes up an estimated 70% of the alcohol market and blamed repeated excise increases. No source for the figure was given.
In Mexico, the Wine and Spirits Industry Commission (CIVyL) – backed by Diageo, Pernod Ricard, Bacardi, Beam Suntory, Brown-Forman, Campari, Moët Hennessy and Casa Cuervo – supplied figures in June, reported by La Razón, claiming the informal market is worth 36.4 times the 2026 budget for mental health and addiction prevention services. In August, it cited a figure of 44.2% for spirits while calling for the special tax on alcohol to be based on alcohol content instead of price, ahead of the 2027 budget. In Brazil, where rates for the new selective tax on harmful products are still being set, the president of the Brazilian Association of Distilled Beverages (ABBD) – whose members include Diageo, Pernod Ricard, Beam Suntory, Brown-Forman and Bacardi – told a seminar that 28% of spirits sold in the country are illicit.
In Sri Lanka, Distilleries Company of Sri Lanka, the country’s largest spirits producer, claimed in its annual report that further tax increases could push people towards illicit alcohol. It gave no data on the size of the illicit market. The same report shows the company’s excise payments rose 20.7% to 102.9 billion rupees in the year to March 2026, while group profit after tax rose 16.3%, helped by its new brewery business. In the Philippines, where the Department of Finance wants to more than double the excise tax on distilled spirits in 2027, the Alcoholic Beverages Alliance of the Philippines told a congressional hearing that a “substantial and abrupt increase” could encourage illicit trade. At the same hearing, the president of the Distilled Spirits Association of the Philippines cited estimates that a 1% tax increase could reduce sales volumes by roughly 1% – the effect alcohol taxes are designed to have.
When Governments Adopt Industry Numbers
The numbers gain authority when public officials repeat them. On 5 September, the Director of Enforcement at Kenya’s Anti-Counterfeit Authority wrote in the Daily Nation that “A study commissioned by the Alcoholic Beverages Association of Kenya in conjunction with Euromonitor International and published in August 2026 estimates that illegal alcohol accounts for about 60 per cent of alcoholic beverages consumed in Kenya”. The study was in fact launched in May 2025. The association’s members include Diageo’s Kenya Breweries, Heineken and Pernod Ricard, according to Movendi International.
In Nigeria, Health Minister Muhammad Pate – speaking through his Permanent Secretary at the launch of the national alcohol policy on 27 August – raised concern over illicit alcohol, Vanguard reported, “citing industry estimates from the Spirits and Wines Association of Nigeria based on a 2024 Euromonitor survey.”
In Kenya, the industry has already been rewarded. The Finance Act 2026 cut the excise tax on extra neutral alcohol – the main input for spirits – from KES 500 to KES 80 per litre, an 84% cut and close to the rate the association had asked for, Movendi International reported. The association’s chair, Kui Kinyanjui, then presented the tax cut as a measure against illicit trade: “The recent reduction of excise duty on Extra Neutral Alcohol to Sh80 per litre is a practical example of how tax policy has narrowed the profit margins enjoyed by illicit mixers and reduce cross-border smuggling.” Lower taxes on ethanol act as a subsidy to alcohol producers and makes alcohol cheaper and more accessible.
South Africa followed a similar path earlier this year, when an industry campaign built on illicit trade claims helped hold the 2026 excise increase to inflation.
Numbers the Industry Pays For
The figures have a common origin. In a 2018 white paper, Euromonitor International stated that “In the past seven years, SAB Miller and AB InBev have commissioned Euromonitor International to conduct research on illicit alcohol markets worldwide.” The paper lists 24 countries across Latin America, Africa and Eastern Europe, including Uganda, Tanzania, Nigeria, South Africa, Zambia and Mexico. Its key message is that “Prices are the main driver of illicit alcohol demand”, and its advice to governments is to “Avoid excessive and discriminatory taxation and regulation to the licit players”. Eight years later, TRACIT’s director-general gave South Africa’s Treasury the same message.
Since then, industry groups have ordered new estimates. The Alcoholic Beverages Association of Kenya, ABBD in Brazil, Poland’s spirits industry employers’ association and the Confederation of Malaysian Brewers have all published illicit alcohol figures to argue against tax increases. By Big Alcohol Exposed’s count, industry-commissioned or industry-published illicit alcohol estimates now exist for at least 30 countries. Movendi International analysed how this system works in February, and the Big Alcohol Exposed 2025 report identified illicit trade fears as one of the industry’s three dominant misconduct patterns last year.
Two features stand out. First, the methods are hidden, and the reports are impossible to verify. Uganda’s latest study rests on 50 store visits, 15 interviews and an online survey, but the model that turns these into national estimates is never described. University of Cape Town economists Corné van Walbeek and Nicole Vellios found that South Africa’s study “provides many statistics, often with a high degree of precision, but does not indicate a source, other than ‘Euromonitor International'”. Second, the definition is wide. Euromonitor counts “Alcoholic beverages produced following artisanal practices, including home production” as illicit when they are made for sale in breach of local law. Traditional brews sold in villages end up in the same category as counterfeit whisky, which makes the illicit share far larger than counterfeiting alone. In Brazil, ABBD’s president said that of the 28% illicit share, counterfeit products account for only about 4.7%.
Numbers That Do Not Add Up
Government data do not support the industry’s story of fast-growing illicit markets. In South Africa, the Drinks Federation’s study claims illicit volumes grew by 55% between 2017 and 2024. Van Walbeek and Vellios tested this claim against Treasury’s revenue data and found legal sales growing over the same period, with real excise revenue increasing steadily for all alcohol categories. They write that “there is a stronger case for a decrease in the illicit alcohol market than an increase” and conclude that “The available data do not suggest that there is a surge, or, for that matter, an increase, in illicit alcohol activity.” The contrast with tobacco is stark: legal cigarette consumption per person fell by more than 60% between 2010 and 2024 as illicit cigarettes took over the market.
What the Evidence Says
Independent evidence does not support the claim that taxes are the main driver of illicit markets. The WHO technical manual on alcohol tax policy and administration expects the argument: “First, the industry is likely to argue that alcohol taxes result in increases in unrecorded consumption of alcohol.” It concludes: “Price and tax are not key determinants of unrecorded trade: rather, unrecorded trade is often a result of weak governance or a lack of tax administration capacity.”
A review led by Jürgen Rehm notes that “the alcohol industry has repeatedly brought unrecorded alcohol into the debate as a barrier for taxation increases”. It found that “Unrecorded alcohol consumption did not automatically increase with increases in taxation and subsequent price increases of registered commercial alcohol.” The authors concluded that unrecorded consumption “should not be considered to be a principal barrier to implementing tax interventions, as evidence does not indicate an increase in consumption if mitigation measures are put in place by governments.” In 2025, WHO/Europe found “no direct link between higher taxes and unrecorded alcohol consumption.”
When Lithuania raised alcohol taxes sharply in 2017, researchers found no evidence of increased illegal alcohol use. At the South African Treasury workshop, Charles Parry of the South African Medical Research Council told officials: “Unlike the case with tobacco, revenue data for alcohol shows an increase in recent years, discounting the view that the illicit trade is increasing rapidly… So the illicit trade is a reality, but it’s a manageable policy risk.”
WHO recommends meeting illicit alcohol with effective tax administration and enforcement – tax stamps, tracking systems and licensing – alongside alcohol tax increases.
A Tactic Borrowed From Big Tobacco
Heineken made the comparison itself, claiming in June that South Africa’s alcohol industry could face the same fate as the tobacco sector. Research on tobacco shows how unreliable industry figures on illicit trade are. A systematic review in Tobacco Control found that “Of the 35 assessments reviewed, 31 argued that tobacco industry estimates were higher than independent estimates,” and concluded that “Tobacco industry data on ITT are not reliable.” Researchers have also questioned the reliability of Euromonitor’s illicit cigarette estimates, and in 2019 Euromonitor accepted funding from Philip Morris International.
The two industries also share the same platforms. TRACIT – whose director-general addressed South Africa’s Treasury – received funding from PMI IMPACT, Philip Morris International’s anti-smuggling fund, and has listed tobacco companies as members. Its alliance partners include spiritsEUROPE, the World Spirits Alliance, the Scotch Whisky Association, the Wine and Spirit Trade Association and the Worldwide Brewing Alliance. TRACIT’s website hosts the Euromonitor studies paid for by SABMiller and AB InBev.
In Brazil, the seminar where ABBD presented its 28% figure was part of the “Mercado Ilegal” media project run by O Globo, Valor, Extra and CBN radio. The project is sponsored by Philip Morris Brasil and BAT Brasil, among others, with ABBD listed as a supporter. The Brazilian Institute for Competitive Ethics (ETCO), which campaigns on illicit trade, lists BAT’s subsidiary Souza Cruz and Ambev among its member companies.
A 2023 review in BMJ Global Health described the pattern: “One of the common arguments the tobacco and alcohol industries have used to challenge health taxes is to claim that these policies will be ineffective because they will encourage illicit trade.”
The alcohol industry pays for the numbers, supplies the spokespeople and all too often gets the tax outcomes it wants.
Sources
Euromonitor International. Size and Shape of the Global Illicit Alcohol Market. London: Euromonitor International; 2018.
Njuki, E. “Building a safer alcohol market by tackling illicit trade.” The Independent (Uganda), August 2026.
Kinyanjui, K. “Balancing enforcement, harm reduction, reform on illicit liquor.” Business Daily, August 2026.
Rehm, J., Neufeld, M., Room, R., Sornpaisarn, B., Štelemėkas, M., Swahn, M.H., Lachenmeier, D.W. (2022). “The impact of alcohol taxation changes on unrecorded alcohol consumption: a review and recommendations.” International Journal of Drug Policy, 99, 103420.
Gallagher, A.W.A., Evans-Reeves, K.A., Hatchard, J.L., Gilmore, A.B. (2019). “Tobacco industry data on illicit tobacco trade: a systematic review of existing assessments.” Tobacco Control, 28(3), 334–345.