HomeNewsBriefAlcohol Smuggling: A Hangover for Latin America?
BRIEF

Alcohol Smuggling: A Hangover for Latin America?

CONTRABAND / 1 NOV 2018 BY PETER MCCAFFERTY EN

A new report shows how sales of illegal alcohol in Latin America make for a booming contraband industry that is hardly ever held accountable.

The report by Euromonitor International says 15 percent of alcohol is sold illicitly in Latin America. With total annual sales regionally of $4.8 billion, potential annual revenue reaches $720 million.

Mexico tops the list with 42.5 percent of its alcohol sales coming from illegal sources.

     SEE ALSO: Coverage of Contraband

Chile sits proudly at the bottom of the regional table with a level of consumption of only 1.2 percent. The difference is likely due to Chile’s higher gross domestic product (GDP) per capita of about $15,000. By comparison, Mexico’s GDP per capita is just under $10,000.

The main effect of this illegal trade is the loss of around $1.7 billion in tax revenue. The large profits available from these illegal alcohol sales only further embed the trade and increase the value of undeclared incomes within illicit economies.

InSight Crime Analysis

Bootlegging is often seen as a cheeky, victimless crime. But the lack of controls when it comes to production and transport, coupled with high profits and a growing market, makes it an extremely attractive business for expanding criminal organizations.

It is also a crime that is rarely prosecuted. A previous Euromonitor study, for example, placed Peru at the top of the regional sales league with more than 50 percent of its alcohol coming from illegal sources. In 2013 this prompted new legislation and sentencing to counter the various trades in alcohol. By 2016, no-one had been prosecuted under this legislation.

 SEE ALSO: Peru News and Profile

Illegal brewing also has a low threshold of entry. It is low-tech, cheap to start up, and comes with a ready market for the end product. The same applies to drink tampering, where genuine product is diluted and repackaged into used bottles. Where, according to Euromonitor’s Lourdes Chavarria, ethanol is a cheap and common additive. The consumption of which can lead to blindness and death. So, as is often the case, it is the poorer consumer who falls victim more often.

With regional sales in alcohol set to increase by over five percent, and with Latin American countries seen as a marketplace with plenty of room for expansion, it is not difficult to see how small and large criminal actors could uncork large profits with low risk in the times ahead.

share icon icon icon

Was this content helpful?

We want to sustain Latin America’s largest organized crime database, but in order to do so, we need resources.

DONATE

What are your thoughts? Click here to send InSight Crime your comments.

We encourage readers to copy and distribute our work for non-commercial purposes, with attribution to InSight Crime in the byline and links to the original at both the top and bottom of the article. Check the Creative Commons website for more details of how to share our work, and please send us an email if you use an article.

Was this content helpful?

We want to sustain Latin America’s largest organized crime database, but in order to do so, we need resources.

DONATE

Related Content

BOLIVIA / 7 JAN 2014

Officials in Peru have identified four land and water routes used to traffic cocaine to Bolivia and one used to…

HOMICIDES / 5 JUN 2011

A look at official homicide statistics provides further evidence for the theory that violence rises in parts of Mexico where…

EL COSS / 4 SEP 2012

The Mexican Navy announced the arrest of the brother of one of the original founders of the Gulf Cartel, Osiel…

About InSight Crime

THE ORGANIZATION

InSight Crime Tackles Illegal Fishing

15 OCT 2021

In October, InSight Crime and American University’s Center for Latin American and Latino Studies (CLALS) began a year-long project on illegal, unreported, unregulated (IUU) fishing in…

THE ORGANIZATION

InSight Crime Featured in Handbook for Reporting on Organized Crime

8 OCT 2021

In late September, the Global Investigative Journalism Network (GIJN) published an excerpt of its forthcoming guide on reporting organized crime in Indonesia.

THE ORGANIZATION

Probing Organized Crime in Haiti

1 OCT 2021

InSight Crime has made it a priority to investigate organized crime in Haiti, where an impotent state is reeling after the July assassination of President Jovenel Moïse, coupled with an…

THE ORGANIZATION

Emergency First Aid in Hostile Environments

24 SEP 2021

At InSight Crime's annual treat, we ramped up hostile environment and emergency first aid training for our 40-member staff, many of whom conduct on-the-ground investigations in dangerous corners of the region.

THE ORGANIZATION

Series on Environmental Crime in the Amazon Generates Headlines

17 SEP 2021

InSight Crime and the Igarapé Institute have been delighted at the response to our joint investigation into environmental crimes in the Colombian Amazon. Coverage of our chapters dedicated to illegal mining…