Illicit alcohol costs Tanzania over Sh1 trillion annually, study finds
Deputy Minister of the Ministry of Industry and Trade, Dennis Londo (third from left), pictured with stakeholders from the sector during the launch of the Euromonitor report highlighting the impact and scale of the illicit alcohol problem in Tanzania, and how it affects the economy, public health, and consumers.
Dare Salaam. Illicit alcohol consumption is costing Tanzania more than Sh1 trillion in lost government revenue each year while posing serious risks to public health, a new study has revealed.
According to the study, an estimated 61 percent of all alcohol consumed in the country is illicit, resulting in annual revenue losses of about Sh1.026 trillion due to unpaid taxes and duties.
The findings mirror trends in neighbouring countries. Similar studies conducted by Euromonitor International in Kenya and Uganda in 2025 found illicit alcohol accounted for 60 percent and 67 percent of total consumption, respectively.
Illicit alcohol, as defined in the study, includes products that do not comply with tax, regulatory and legal requirements. This ranges from alcohol on which excise duty has not been paid, to products lacking mandatory health permits or produced using unapproved ingredients. Informal distribution through unlicensed outlets also accounts for a significant share of illicit alcohol consumption.
The study found that illicit alcohol cuts across all categories, including spirits, beer and wine. However, illegal artisanal brews and traditional alcoholic beverages—such as mbege, komoni, wanzuki, ulanzi and dengerua—account for the largest share of illicit consumption. While these products hold cultural significance, their widespread use is largely driven by affordability.
Prohibited spirits such as gongo can be up to 80 percent cheaper than legal alternatives, making them attractive to consumers. Counterfeit and smuggled alcohol also remain a persistent problem, particularly in the spirits and beer segments.
Beyond the economic impact, the study warns that illicit alcohol presents significant health risks due to unsafe production practices and possible contamination with toxic substances. Researchers noted that these dangers are increasing as the illicit alcohol market grows faster than the legal sector.
The study was conducted by Euromonitor International on behalf of the Confederation of Tanzania Industries (CTI), in collaboration with Serengeti Breweries Limited (SBL). It compares current consumption patterns with 2017, when illicit alcohol accounted for 55 percent of total consumption, highlighting a steady expansion of the illegal market.
Speaking during the release of the findings, Deputy Minister for Industry and Trade Dennis Londo said the scale of the problem requires urgent and coordinated action.
“The loss of more than Sh1 trillion every year due to illicit alcohol undermines the Government’s ability to finance essential social services and protect the health of citizens,” Mr Londo said. “This study provides critical evidence to guide policy decisions and strengthen collaboration between government and stakeholders.”
The report shows that the largest share of revenue losses—about Sh709 billion annually—is linked to illegal artisanal brews, particularly gongo. Additional losses arise from counterfeit alcohol, smuggling and tax leakage, where excise duties are partially paid or completely evaded.
CTI Executive Director Leodegar Tenga said the absence of reliable data had long hindered efforts to address the illicit alcohol trade.
“This trade operates largely outside formal systems,” Mr Tenga said. “The study was commissioned to close the information gap, reveal the true scale of the problem and support evidence-based interventions.”
Euromonitor International consultant Benjamin Rideout said the research relied on a mixed methodology, including fieldwork, stakeholder interviews and consumer surveys, to capture a market that is largely invisible in official statistics.
“Illicit alcohol is not recorded in formal systems, so extensive primary research was essential to ensure the findings reflect reality and allow comparison over time,” Mr Rideout said.
From the private sector, Serengeti Breweries Limited said the findings underline the broader impact of illicit alcohol on consumers and legitimate businesses.
“Illicit alcohol endangers lives, reduces government revenue and undermines businesses that comply with the law,” said SBL Managing Director Obinna Anyalebechi. “Our involvement reflects a commitment to supporting evidence-based dialogue and sustainable solutions.”
Despite widespread awareness of the health risks, the study found that lower prices, easy access through informal channels and social acceptance continue to drive consumption.
To address the problem, the study recommends strengthening ethanol regulation, enhancing border and internal enforcement, increasing consumer awareness and expanding the use of technology such as tax stamp verification systems to curb the illicit alcohol trade
