South Africa is losing billions of rand each year to an underground economy that many people participate in without even realizing its cost — the illicit alcohol trade. It’s a crisis that’s quietly grown into a R25.1 billion industry, robbing the country of R16.5 billion in tax revenue.
The situation has worsened dramatically over the last seven years, with the illegal trade expanding by 55%, far outpacing growth in the legal alcohol market. Nearly one in five alcoholic drinks sold in the country is now illegal.
What makes this alarming isn’t just the lost revenue — it’s the scale and sophistication of the problem. Instead of small-scale homemade brews, South Africa is dealing with large operations producing counterfeit alcohol that closely mimics legal products. Experts warn that unless there’s stricter control over key production ingredients like ethanol and tougher enforcement, the issue will continue to spiral.
There’s also a human side to the crisis. In a difficult economy, people are turning to cheaper alternatives. With a price gap of up to 70% between legal and illegal alcohol, many consumers in low-income areas are knowingly choosing the cheaper, riskier option. A recent study revealed that over two-thirds of surveyed South Africans admitted to buying illicit alcohol because of its affordability.
But this affordability comes at a cost. Not only does it undermine legitimate businesses and threaten jobs in the formal sector, it also poses serious health risks. Tests have shown that some of these illegal drinks contain dangerous substances like methanol, which can cause blindness, organ failure, or even death.
The impact ripples far beyond just lost money. Communities are exposed to toxic products, the government loses critical funds for public services, and legitimate businesses struggle to compete with unregulated rivals.
In response, efforts are underway to raise awareness. A new national campaign aims to educate the public about the dangers of illicit alcohol, how to identify counterfeit products, and where to report them. The hope is that by empowering both consumers and traders with knowledge, the country can begin to turn the tide against this growing black market.
Stopping this wave will require more than just talk. It demands genuine cooperation between government, industry players, and the public to dismantle illegal operations, enforce the law, and protect both lives and livelihoods.