How fake liquor is hitting government and distilling firms

Thursday March 17 2022
pic illicit liquor
By Gadiosa Lamtey

Dar es Salaam. Unscrupulous persons have turned the spirits business into their source of quick money as they cash in on unsuspecting imbibers to earn lucrative returns through the sale of fake liquor, it was revealed in Dar es Salaam yesterday.

Tanzania Distilleries Limited (TDL), a subsidiary of the Tanzania Breweries Limited (TBL), told members of a Parliamentary Committee on Trade, Industry and Environment yesterday that trading in illicit liquor was on the rise in the market.

TDL says it loses an average of Sh19.5 billion in revenue each year due to the competition posed by increase in trading of illicit and counterfeit alcohol brands in the market.

At the same time, the government also loses an average of Sh11.5 billion each year in tax foregone due to the illicit business.

“This illicit trade is influenced by the price of alcohol in the market and the growth of informal markets, largely occasioned by fiscal measures of the government. It also results from poor control of ethanol in the country,” TBL’s Legal and Corporate Affairs director Mesiya Mwangoka told the legislators who visited the TDL plant at Temeke in the city. Data collected by TDL shows that most of the illicit counterfeit brands were distributed in the southern regions, followed by northern regions, the Southern Highlands Zone and the Lake Zone.

Most of the recorded losses have emanated from counterfeit versions of TDL’s flagship Konyagi brand.

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Illicit and counterfeit alcoholic products do not only affect manufacturers and the government in terms of revenues, but also pose a significant health risk to consumers, since they are unregulated and may contain toxic additives.

“We urge the government to enforce strong laws against the culprits, to impose strong control measures in all borders through the Tanzania Revenue Authority (TRA), and to continue to work in partnership towards the socio-economic development of Tanzania,” Ms Mwangoka concluded.

Addressing challenge of the production of illicit alcoholic beverages in the country outlined by TDL, Industries Trade and Investment deputy minister Exaud Kigahe said the government through the Fair Competition Commission (FCC) will identify factories that produce illicit spirits and legalise them so that they can compete with the giants like TDL in the market and also engage TBS to inspect the standards of their beverages.

However, regarding the counterfeit brands, he said after receiving a report from TDL the government will conduct its investigation on the said factories and take legal measure would be extended against them, noting that such manufacturers are killing well established and trusted brands and also put health at risk.

During the visit, Mr David Kihenzile (Mufindi South - CCM) said there was a need for the government to work on the challenges presented, and tasked TDL team to present to the committee in writing the challenges and they will revert with the way-forward