HomeNewsBriefReport Highlights Size, Scope of Contraband Alcohol Market in LatAm
BRIEF

Report Highlights Size, Scope of Contraband Alcohol Market in LatAm

COLOMBIA / 15 MAY 2014 BY MICHAEL LOHMULLER EN

A recent study of the illicit liquor market in six countries in Latin America documents the size and scope of a lucrative regional industry for criminal groups that accounts for hundreds of millions of dollars in lost state revenue each year.

Euromonitor International (pdf) examined the volume and value of illegal alcohol sales in Colombia, Ecuador, El Salvador, Honduras, Panama and Peru, finding that in 2012 this market accounted for a total fiscal loss of $736 million in these countries, with contraband and counterfeit products the principal contributors.

During 2012, illegal alcohol represented 25.5 percent of the total alcohol market in volume and 14.1 percent in value.

The average retail prices of illegal booze was found to be 30.3 percent lower than that of legal products, with smuggled alcohol sold at lower prices to undercut the legal market.

According to the report, these prices gaps, coupled with a lack of controls on residual ethanol supplies and weak law enforcement in the region, are key drivers of the trade.

Of the six countries, Colombia was found to have the highest value illegal market in 2012, worth over $1 billion in retail sales, which resulted in a total fiscal loss of $468 million. Peru's illegal market share, meanwhile, was the highest in the region, worth over 30 percent of the total liquor market.

InSight Crime Analysis

Latin America is home to a thriving trade in illicitly conceived liquor. In Colombia particularly, weak border controls contribute to a massive influx of contraband goods into the country, while adulterated liquor is also an important source of profit for criminal gangs.

The illegal alcohol trade is just one of a plethora of pirated and counterfeit goods markets in Latin America, prominent among them fuel smuggling and contraband cigarettes. At the beginning of 2014, Colombia's tax and customs police were seizing nearly $300,000 worth of contraband a day.

These markets offer appealing money-laundering opportunities for criminal groups, such as the Urabeños and Rastrojos, who are believed to control some of the flow of smuggled goods into Colombia.

SEE ALSO: Coverage of Money Laundering

Venezuela is a major source of contraband goods, a phenomenon facilitated by government price and currency controls, which offer great potential for profit in neighboring countries. Free trade zones like the one in Colon, Panama are also attractive sources of cheap liquor and cigarettes.

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

COLOMBIA / 24 SEP 2015

Colombia's government and rebel group the FARC have reached an agreement on transitional justice and announced that the longest-running conflict…

AUC / 18 JUL 2016

A recent ruling by Colombia’s Justice and Peace Court that mentioned Postobón called for employees of the iconic soft drink…

CONTRABAND / 12 AUG 2020

The Cuban government has sent squads of military and police to end a spike in the selling of goods on…

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…