Now a story by Nick Wilson, journalist at News twenty four really caught my eye. It's based on comments made by the Drinks Federation of South Africa and they estimate that almost one in five drinks consumed in South Africa we're talking about alcoholic drinks now contains illicit alcohol and that may in turn include deadly additions such as methanol and even industrial ethanol. So what's going on here? Where is this coming from? How's it finding its way into
the South African market. Let's welcome to the show then, doctor Shamal Ramasa, who is head of research at the Drinks Federation of South Africa. Doctor Ramasa, welcome and thanks very much for your time. Is this a problem we can connect, for example, to the restrictions imposed during the COVID era on alcohol or has this been going on for much longer affinuon.
So yes, we find that, you know, listed alcohol has been in the country for longer than COVID. But it seems that COVID has exacerbated the problem itself because it proved that there was a lucrative market for this type of alcohol in South Africa. So yes, we can't say that the lockdown and alcohol dan have exacclybated the infit alcohol architecture in South Africa.
So, doctor Ramasa, is this alcohol that masquerades as, for example, being something else? Would it have a label that says either counterfeiting an existing whiskey brand for the sake of argument, or invents another whiskey brand like Highland Fog or whatever. I hope there isn't something called that, but you know what I mean, trying to look authentic, or is this stuff going in unlabeled bottles and perhaps being sold in bulk in some form.
Well, it's a combination of all that you mentioned, So I think it might be interesting to, you know, to define your listed alcohol. The first is the one that you did mention, and that's the counterfeit and illicit brands. And these are fraudulent imitations of legitimate brands. But it could also then be uh, you know, unknown bottles or mummiking, uh you know known brands where there's falsification and tampering you know of the of the the bottles itself. So
so that's the first part. The second one that we get is contraband or smuggling, and this is alcohol which is original and it's legitimate, but it's being illegally important or smuggled uh into the country itself and basically you know, another example of this is round shipping, where it's uh you know, alcohol taking cross borders so we pay no duties on them, and then it's brought back into the country and it escapes the tax system as well. Then you get tax leakage. And this is really where uh
you know, there's misclassification of products. For example, you get a sugar fermented ale versus a wine and because they are class if I differently, the manufacturers themselves are paying the incorrect taxes on them, so it's considered ulicit. And the last one is something that we know, and that's your traditional alcohol theres is which are made but unfortunately sold right and they're sold then no taxes are paid
on them. So those those are the broad categories that we define illicit alcohol under.
It's important that you've spelled out the range of things going on because while you were talking Dr Ramas, I'm trying to think what do we do about it? And it would seem given the range of offences, there's all sorts of players who need to be involved. Obviously there's you as the industry looking to protect businesses that you've built up over time and with huge investments of money. But then there's obviously excise issues as well. Who's dealing
with this? Do we have a strategy that takes into account the multiple manifestations of this broad problem.
That's a great question.
A think.
It's one of the outcomes of a panel discussion that we held at Gibbs University yesterday where it was decided that there needs to be a whole of society approach
towards tackling this problem. And the whole of society involves the industry itself, but also government representatives from from sales, from the department located industry from a law enforcement but we also rely heavily, will rely heavily on the public to report these matters so that we can you know, get proper intelligence and do proper rates on the type
of illegal manufacturers. So, you know, it was decided yesterday that the Drings Federation of South Africa, you know, should coordinate this type of multi stakeholder project so that we can get the best type of outcomes.
Is there is you know, for example, the illicit alcohol in other words, not well known brands, for example, being smuggled, but where stuff is being made some well, let me ask the question differently, is a lot of the stuff being made in South Africa? If it isn't and is being imported, do we know which countries are the key suppliers.
So it's a combination of both. You would start to see in the media recently there's quite a lot of buss happening. In fact, there was one in Johannesburg, I think on Monday where huge amounts of fake alcohol was being produced. And then there are other similar operations that we have seen been bussed inn in Free States and
so on. So South Africa does have its own production facilities, but also because it's become such a lucrative market, there are global companies for the want of better words, that are producing these counterfeit brands and a maskl and because of our poorest borders, unfortunately we're starting to see them, you know, father into the country as well. So it's a combination of both.
Let's talk about the ethanol. In the methanol, explain to us what's being done there and share with us your thoughts on some of the risks for people who might and almost certainly unknowingly drink it.
Sure, so whenever the illegal manufacturers try to counterfort the product, they try to increase the strength of their brew or the you know, the alcohol itself, and they start adultraating it with chemicals. So we run a chest a study last year actually at the University of causing the LTEL, and we tried to chemically analyze what's in these products. And to your point, we find huge concentrations of methanol or industry or grade ethanol. Now, these have deliterious effects
on human health. For example, methanol in itself causes irreversible blindness if it's drunk in high concentration, it causes toxicity of the blood, a condition we call metabolic acidosis, which can lead to multiple organ failure and almost always you know,
a company by deer. In fact, from our study itself, we showed the consumers actually told us that twenty nine percent of them knew of somebody who have physically died from consuming counterfeit alcohol you know, industrial get alcohol itself also had these these effects on the body, including prospiratory distress, cardiac failure, and so on. So these products are extremely dangerous to consume, thank you.
Very much. That's those are the thoughts there of doctor Shamil Ramasa, head of Research at the Drinks Federation of South Africa. Illegal alcohol and its implications for health, for jobs, for the collection of taxes and revenue. Is it something you're aware of. I mean maybe in circles that you move in, maybe people have approached you with what they say a good deals on what might be premium brands.
I don't know. It's not a space that I'm involved in, except during COVID when there was a crackdown on alcohol. I did keep getting WhatsApps offering me wine for sale at extremely inflated prices. And the reason these people had my number was I'd actually got some cats from them, but they thought, well, may as well give him a try. Anyway, that was a long, long, long time ago. Seven oh two drive. It's four o'clock