Alcohol manufacturers raise the alarm over illicit trade

The Spirits and Wines Association of Nigeria has raised concerns over the scale and impact of illicit trade in the country, warning that it poses serious risks to public health, government revenue and legitimate businesses.

The association raised the concerns at a press conference held immediately after a one-day workshop in Abuja on Wednesday, themed ‘Combating Illicit Trade in the Spirits and Wines Industry’.

SWAN, the industry body representing companies engaged in the manufacturing, importation, distribution and marketing of spirits, wines and other alcoholic beverages in Nigeria, counts both global and local firms among its members, including Bacardi, Diageo, Distell, Guinness Nigeria, Moët Hennessy, Nigerian Bottling Company, Nigerian Breweries and Pernod Ricard.

The SWAN President, Michael Ehindero, said that the workshop brought together regulators, policymakers, enforcement agencies and key industry players to address the challenge.

“Our discussions are based on a fairly shared concern. Illicit trade, particularly in spirits and wines, remains a significant threat to the public health of Nigerians, to government revenue, and to the sustainability of legitimate businesses operating within the law in Nigeria,” Ehindero said.

He stressed the need for stronger collaboration among stakeholders to tackle the issue effectively.

“Throughout this workshop, participants examined the scale and impact of illicit alcohol, shared insights from both local and international perspectives, and more importantly, identified practical and coordinated approaches to tackle the problem.

“One of the important takeaways from today’s session is about collaboration. No single stakeholder can address the issue,” he said.

The president stressed that the consequences of illicit trade go beyond financial losses, stressing the “human cost associated with unsafe products.”

Speaking on the drivers of the problem, Ehindero said illicit trade is not unique to the industry and is fueled by multiple factors.

“Illicit trade is not specific to this industry. It is a pervasive issue. We have heard other industrial associations make the same issues and complaints,” the president said.

He identified consumer demand for cheaper alternatives, regulatory lapses and taxation pressures as contributing factors.

“There is an incentive for people to cheat or engage in unsafe practices. Because it is a business, people often seek cheaper alternatives. That desire for lower-cost products also drives the growth of these illicit businesses.

“There are also systemic issues, including possible regulatory lapses. It happens,” he noted.

The Director-General of SWAN, Tony Okwoju, said the magnitude of illicit trade in the sector is significant, citing recent data.

“According to a survey carried out by Euromonitor in 2024, the level of illicit trade in spirits and wines in Nigeria was about 40 per cent, which suggests that for every five bottles sold, two were from illicit trade. So that alone gives you a sense of how large it is,” Okwoju explained.

The DG added that the trend has major implications for government revenue, noting that illicit operators do not pay taxes.

Okwoju also noted ongoing collaboration between industry players and regulators, including the National Agency for Food and Drug Administration and Control.

“Our members are continually collaborating and engaging with the enforcement agencies, not just NAFDAC, with a view to working together to fight this. It is a continuum,” he said.

Also speaking, Managing Director of the Alliance Against Counterfeit Spirits, David Francis, clarified that counterfeit products represent only a portion of the broader illicit trade.

Francis explained, “When we are talking about illicit trade and those headline numbers, that includes tax-evaded, smuggled and parallel products.

“Counterfeit is a subsection of that, with particular dangers related to unregulated production. Counterfeit is a smaller subset of the overall illicit market. It is important to bear that distinction in mind,” he said.

Participants at the workshop called for sustained collaboration, improved regulation and increased public awareness to curb illicit trade and protect consumers.

Illicit alcohol trade has remained a recurring challenge in Nigeria’s regulated beverage sector, with concerns often raised about counterfeit, smuggled and tax-evaded products circulating in the market.

Industry stakeholders say these products affect legitimate businesses, reduce government revenue and raise concerns about consumer safety.