Illicit Trade in High-Risk Sectors

Annex A. IARD recommendations for addressing the challenges of unrecorded alcohol

1. The recommendations cover actions that governments, industry and the community can take (IARD, 2018).

Government

2. For illegal alcohol, including contraband, counterfeit items, products on which taxes have not been paid, and non-conforming alcohol, the association endorses: i) proportionate regulation of physical access and availability; ii) appropriate pricing policies that avoid extreme price differentials; iii) favourable fiscal incentives for production of affordable, safer alternatives; iv) monitoring and tracking of raw materials, notably denatured alcohol used in large-scale production; v) appropriate enforcement and controls in special trade or customs zones to prevent illegal activity; vi) aligning regulation across different sectors using denatured alcohol, medicinal potions and tinctures; vii) requirement for non-toxic denaturants or denaturants that change taste or colour with ethanol; viii) monetary incentive to return empties (preventing refills); and ix) improved collaboration between law enforcement and the justice system for effective prosecution and dismantling of organized trade in illegal alcohol.

3. For dealing with artisanal production issues, it is recommended that i) permits or registration be introduced where potential production volume is high (possibly with a tax exemption), ii) reuse of communal equipment be supported where home production is legal but unrecorded and iii) codes of practice be developed to establish standards for production and testing.

4. To discourage consumption of surrogate alcohol, i) limits could be established on the size of bottles to discourage the sale for purposes of consumption, ii) the packaging of surrogate alcohol should not lead to any confusion with alcohol, iii) sales of medical alcohol in pharmacies and other outlets could be limited and iii) use of ill-tasting denaturants in chemical solutions could be required.

Community

5. For the community, efforts concerning illegal alcohol should focus on improving education and social control around unrecorded alcohol: i) anonymous reporting of illegal production facilities and counterfeits in outlets should be encouraged; ii) public education and media campaigns focused on the nature of illegal activities should be pursued, iii) public education and media campaigns on the potential harms to health and potential poisoning from adulterated alcohol beverages should be developed, iv) awareness of the role that illicit activity plays in the market should be highlighted, and v) public education about new advances in labelling and packaging, to enable consumers to identify and avoid counterfeit alcohol should be supported.

6. For dealing with artisanal production issues, it is recommended that i) community education about safety and integrity standards and quality be endorsed, ii) cooperatives for production of village alcohol be supported, iii) competitions for (legal) home producers should be developed to encourage quality standards and iv) community policing and enforcement of order around establishments should be pursued where these are unregulated and out of bounds for law enforcement.

7. For surrogate alcohol, i) community education about the dangers of consuming non-potable products should be advanced and ii) support should be given to indigent and marginalized social groups.

Industry

8. For industry, efforts in the area of illegal alcohol, this would include i) co-operation with law enforcement and customs, ii) intelligence sharing, iii) support for the development of standards in denaturation across different industries, iv) support for spot-checking and quality control of alcohol in serving establishments, v) development innovation in labelling and closures and “smart bottles”, vi) support for original bottle collection by legal businesses and vii) technical innovation in authentication techniques.

9. For dealing with artisanal production issues, i) support for the testing of products and ii) education for home producers on safety and quality production techniques.

10. For surrogate alcohol, support for Legal purchase ages for sales of cough medicines and other alcohol-containing products, ii) ensuring that the packaging of surrogate alcohol does not lead to any confusion with alcohol, iii) monitoring of denatured alcohol along the value chain, and iii) support for use of non-toxic denaturants by chemical, pharmaceutical and cosmetics companies.