The ARA’s mission is to reduce alcohol-related harm through combating the misuse and abuse of alcohol beverages and promoting only their responsible use.
Illicit and Non-Commercial Alcohol
- As much as half of the alcohol that is consumed globally is largely unregulated and unrecorded by most governments, and that proportion is even higher in developing countries. For example, WHO’s Global Status Report on Alcohol 2004 estimates that in East Africa, noncommercial alcohol comprises 90% of alcohol consumption, and for Africa as a whole, it is about half. In the Indian subcontinent, noncommercial alcohol accounts for about two-thirds of total alcohol consumption, and it is one third of total consumption in Eastern Europe and Latin America. (1)
- Traditional, home-produced beverages are part of the local culture and economy of many countries. For example, in Botswana in the early 1980s, 30% of all households earned regular income from sorghum beer production, making it the largest non-farm source of employment in the country.
- Because non-commercial and illicit alcohol is not taxed, regulated or recorded, there is little information about the patterns of its consumption and related outcomes. From the available literature, trade in noncommercial and illicit alcohol appears to increase in response to increased restrictions on commercial alcohol. Where large price disparities in commercial alcohol exist between border countries, smuggling and cross-border trading of noncommercial and illicit alcohol have been routinely reported.
- The consumption of noncommercial and illicit alcohol has presented public health issues. There have been many reports of contaminants where poor production facilities are used – particularly where such production is driven “underground” by severe restrictions. Noncommercial and illicit alcohol policy has important social policy implications, particularly where such beverages are produced and/or consumed primarily by low-income segments of the population.
- Neither industry nor public health authorities have sufficient data to accurately assess the full impact that commercial alcohol policy may have on the consumption of noncommercial and illicit alcohol.
We know enough, however, to understand that such effects can be substantial and must be factored into any commercial alcohol policy. This presents a key opportunity for public health authorities and industry to work together to study the impacts of noncommercial and illicit alcohol.
What Are "Noncommercial" and "Illicit" Alcohol Beverages?
The term “noncommercial alcohol” generally refers toalcohol beverages that are not accounted for in official statistics, such as sales or trade figures, and that generally are outside of government control. Noncommercial alcohol is also known as 2 “moonshine,” “local,” “bootlegged,” “unrecorded” or “home-brewed” alcohol, and exists in virtually every country.
There are several different categories of noncommercial alcohol:
- Traditional beverages of high quality. Certain noncommercial alcohol is legally produced and may be traded but is not always taxed.2 Some countries allow for exemptions for the production and sale of specified volumes of home-produced alcohol. In Central and Eastern European countries, as well as in the Mediterranean region, varieties of noncommercial alcohol are usually highquality and sought after. In rural Africa, women brewers are an integral part of the local economy and many of their products are not problematic. In fact, many such beverages undergo informal quality controls that help those producing them maintain high standards that will keep them in business.3
- Traditional beverages of low-quality. This variety may be home-produced and sold at low cost and has been linked with contamination and health problems (e.g., relatively high rates of blindness in India caused by low-quality non-commercial beverages containing methanol).
- “Illicit” alcohol beverages. Although traditional beverages produced and consumed in the home represent some noncommercial alcohol, a large proportion of it is illicit and is made for the purpose of sale. These include beverages produced commercially but passed on informally, such as through smuggling or cross-border trade.
They also include beverages produced illegally for illicit sale, which often are of poor quality. They may also include counterfeit alcohol packaged as legitimate commercial products. In addition to presenting a serious public health concern, illicit alcohol often is associated with organized crime and thus presents a threat to public order. - Substitute products, often containing non-potable alcohol. These types of alcohol (e.g., methylated spirits, shoe polish, aftershave) are used largely by the poor and indigent because they are cheap, readily available and have strong effects. This has been reported in the former Soviet Republics - Russia, Ukraine, Belarus.4 Non-potable forms of alcohol are also a problem in developed countries.
How Prevalent Is Noncommercial Alcohol Consumption?
- WHO’s Global Status Report on Alcohol 2004 reported that relatively few countries have conducted studies on levels of noncommercial alcohol consumption. Rehm & Gmel used specialized surveys, focal point reports or replies to questionnaires sent to individual countries in 2001 to estimate levels of noncommercial alcohol consumption. They found a wide disparity in consumption estimates.
At the low end was Luxembourg with less than 1.0 litres per adult capita and the Republic of Moldova with an estimate of 12.0 litres per adult capita. - The European Comparative Alcohol Studies project estimates that levels of unrecorded alcohol consumption range from .5 litres (Netherlands and Belgium), to 3 around 1 litre (Austria, France, Germany, Ireland, Portugal, and Spain) to approximately 2 litres in the Nordic countries and the United Kingdom.5
In Norway, estimates for unrecorded alcohol are as high as 25% to 30% of total alcohol consumption, according to the Norwegian Institute for Alcohol and Drug Research. The percentage in Lithuania is even higher, estimated at 65% of all alcohol consumed in 1994.
ALCOHOL POLICY’S IMPACT ON NONCOMMERCIAL ALCOHOL
- Smuggling & Cross-Border Trading
A high incidence of smuggling and cross-border trading often is reported in countries that impose strict alcohol prohibitions or have high alcohol taxes.6 For example, in Norway and Finland, professional smuggling reached such high levels during the prohibition era in those countries that it became one of the main reasons prohibition ended.7
Price differentials are also cited as the central driving force behind smuggled alcohol along the Finland/Estonia border.8
Smuggling can be especially problematic when countries share a common border and the cost differential is high. For example, during prohibition in the United States, Canada became the largest source of alcohol smuggled into the United States and, ironically, the United States is now the primary source of alcohol smuggled into Canada.9
Ontario’s Liquor Control Board estimates that CA$800 million in lost sales per year are attributable to the black market.10 Canadian law enforcement estimates that it captures 5% of the illegal alcohol crossing the border.11 - In the Nordic countries where alcohol beverages are taxed heavily, tax-free crossborder trading is high. For example, travelers importing alcohol in 1996 accounted for nearly 15% of total alcohol consumption. In Finland, that number was just over 10% for 1998. In Norway, the estimate was about 10% of total alcohol consumption in 1999.12
Tax-induced cross-border shopping has been observed in Denmark, the Republic of Ireland, and Canada. Cross channel purchases of alcohol by United Kingdom residents have been estimated (1994 figures) at about 10% of total domestic alcohol expenditures.13
- Illicit Commercial Production
Illicit spirits production is common in the Nordic Countries and Russia especially, and may be the bulk of alcohol consumption in developing countries. Particularly in the developing world, illicit alcohol often is the choice of poor and marginalized populations.
Governments sometimes ignore illicit and noncommercial alcohol production in developing countries, knowing that it may be an important source of income for their people. 4 - Public Health and Social Issues
Because noncommercial alcohol is produced and consumed outside of the public health regulations and standards that govern commercial alcohol, it presents serious public health concerns. Contamination and toxicity often occur, and reports of illness and death are not uncommon.14 - For example, in the United States moonshine has been reported to have elevated lead levels that, over time, can have adverse health consequences for consumers.15 A study of emergency room patients in Atlanta16 and a study of rural counties of the Southeastern United States 17 reached similar conclusions.
An exploratory investigation of home-made spirits in Central and Eastern Europe found significantly higher concentrations of methanol than those from commercial sources.18
The use of low-quality ingredients and the production process itself also may pose considerable risk. For example, local beers have been brewed in old oil drums, thereby introducing toxic contaminants. And in Mexico, the fermentation of pulque often involves use of animal excrement, which can contributes to bacterial contamination. - But a small, cross-national study of traditional high-quality noncommercial alcohol beverages in Brazil, India, Mexico, Russia, Tanzania, and Zambia found that the products drunk by study participants contained no toxic elements.
In the case of the Russian samogon, the quality was actually quite good.19 Where producers rely on repeat business, they usually take precautions to ensure some level of quality. - Countries with the highest mortality figures that have been attributed to alcohol by WHO calculations are also countries where estimated volumes of unrecorded consumption are among the highest in the world. In fact, since there is no accurate way to measure unrecorded consumption, these estimates quite possibly are low.
- Traditional alcohol beverages often provide important economic benefits to societies. In Nepal, for example, unlicensed home-brewing accounts for the majority of alcohol available, and most of it occurs in rural areas.20
The poor very often are dependent on home-brewing for their livelihood. South Africa is another example.21
POLICY CONSIDERATIONS
- When setting policies for commercial alcohol, governments must be aware of the impact such policies may have on the production and consumption of noncommercial and illicit alcohol, which accounts for half of world consumption and generally occurs beyond government regulation and control.
Policies aimed at curtailing the availability of commercially produced alcohol increases the production of non-commercial and illicit beverages 22 and may shift trade towards the gray and black markets.23 24 - Although traditional noncommercial alcohol is culturally and economically significant, illicit and low-quality noncommercial alcohol can present important 5 public health and safety risks. Policies that encourage production and consumption of illicit and low-quality noncommercial alcohol should be avoided.
- Governments should explore policies that give producers of traditional highquality noncommercial alcohol incentives to abide by regulations that protect public health and safety.
- Much more research needs to be done on drinking patterns as they relate to noncommercial and illicit alcohol, including how they are influenced by government policies.
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