After a Chinese millionaire paid $10,000 for a single glass of whisky which turned out to be fake, research by the Scottish Universities Environmental Research Centre (SUERC) discovered that counterfeit goods are rampant in the rare whisky market—nearly 40% of high-dollar tipples were found to be inauthentic. Unfortunately, this problem doesn’t merely affect the luxury end of the sector —and the consequences of illicit drinks are often far more severe than a wasted $10,000.
After thousands of people around the world have died from drinking substandard goods, governments have had to warn drinkers of the dangers of counterfeit beverages, many of which contain toxic additives or industrial-strength alcohol. What’s more, the proliferation of cheap illicit booze also encourages substance abuse, fosters tax evasion and short-changes legitimate operators in the industry. Fortunately, a broad swath of innovations, from digital tax stamps to disposable sensors, show promise in cutting down on the epidemic of counterfeit beverages.
A global epidemic
The deadly consequences of fake alcohol can be observed all over the globe. Just last week, hundreds of local governments across England and Wales warned their citizens of the dangers of counterfeit booze containing isopropanol, methanol and ethyl acetate, which can cause dizziness, vomiting, anaesthesia and blindness. In particularly severe cases, such contaminants can even kill. The black market booze industry was recently blamed for the deaths of 21 men in Malaysia and almost 80 people in Indonesia.
Some regions are suffering particularly severely from the scourge of under-the-table beverages. In China, for example, it is estimated that around 30% of all alcohol is illicit. Given that the average Chinese person now consumes 7.5 litres of alcohol a year, even a conservative estimate would mean each Chinese citizen knocks back two litres of potentially lethal moonshine every year, with untold consequences for their health.
In Africa, the issue is even more endemic. Recent raids on illegal alcohol factories in Nigeria, Kenya and Uganda demonstrate the ubiquity of counterfeit drinks in these nations. Uganda is particularly riddled with fake products: a whopping 94% of beer in the country is illicit, while only 37% of spirits are above-board. Overall, more than two-thirds of Ugandan alcohol is counterfeit, and Kampala’s porous borders with its neighbours mean that large quantities of dangerous liquor – often in cheap and convenient individual sachets (officially banned in Kenya over a decade ago and scheduled to be outlawed in Uganda next year) – still finds its way onto store shelves in both countries.
A crime with many victims
Aside from this human cost, the black market in alcohol is responsible for a host of other societal and economic problems. Cheap, unregulated booze, particularly the kind sold in individual sachets, is a major contributor to instances of alcohol abuse, exacerbating the serious drinking problems faced by many nations worldwide.
Then there’s the fiscal angle. A recent study by the European Union Intellectual Property Office (EUIPO) found that counterfeit wine and spirits cost the bloc’s economy a cumulative $3.1 billion every year—the UK alone suffers from $284 million in annual losses. But in emerging economies, corresponding deficits in domestic revenue can be cataclysmic. Kenyan authorities estimate the country misses out on $290 million each year due to fake booze, while Uganda could be losing up to $172 million.
It’s not just the national coffers who suffer, either. Legitimate manufacturers and sellers are undercut by their bootlegging competition, who have lower production costs and offer consumers lower prices by bypassing taxation. This runs the risk of squeezing compliant, taxpaying companies out of the market. In Kenya, for example, up to a staggering 40% of the national economy is currently controlled by illegal industries, manufacturing and selling everything from rice mixed with tar, to false spare parts for vital infrastructure, to the deadly counterfeit drinks.
Clamping down through technology
Facing experts’ predictions that by 2030 the market could be entirely dominated by illicit trade, Kenya has turned to cutting-edge technology for a solution: affixing latest-generation digital tax stamps to each bottle of wine, spirits or beer under its Excisable Goods Management System (EGMS). In addition to security features to prevent counterfeiting, the stamps contain detailed information about each legitimate product—from its manufacturer to the date it was released into the market. QR codes connected to a publicly-available app allow anyone, retailer or consumer, to verify the authenticity of a bottle.
The system has been so successful in Kenya that neighbouring Uganda has announced plans to introduce a similar scheme. While its implementation has temporarily been put on hold after pushback from beverage manufacturers concerned over shouldering increased production costs, the encouraging results in Kenya—domestic excise revenue on goods covered by the EGMS leapt by 43% after the digital stamps were introduced—suggest that Ugandan producers would reap a significant return on any investment.
Elsewhere, other space-age solutions are springing up, though most are still in the development stage. A sensor developed by scientists at Western Illinois University is capable of detecting counterfeit ingredients through the use of 36 colour-changing dyes—though this method necessarily involves opening the bottle to do so, making large-scale testing impractical. At the University of Manchester, meanwhile, researchers are testing a handheld device employing a technique referred to as spatially offset Raman spectroscopy to measure colour pigments in liquids and determine their composition without having to open the bottle. While both projects require further trials, they could eventually hold the key to stamping out the illicit liquor trade once and for all.
Urgent action imperative
Whether a digital tax stamp system that allows users to verify authenticity of a product at any stage of the supply chain or a futuristic gadget which analyses molecular composition of a liquid through innovative techniques, these innovations are sorely needed to address the pressing problem of counterfeit beverages. Without the practicable solution these technologies may provide, the costly consequences of illicit drinks will continue to claim lives and hamper economies.
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