logo
Toolkit for Assessing the Unrecorded Alcohol Market

Why study the unrecorded market?

 A solid understanding of the unrecorded market and its dynamics is of shared interest to a range of stakeholders for a variety of reasons.

For governments, unrecorded alcohol represents fiscal and social challenges in the form of:

  • lost revenue from excise and sales taxes;
  • costs associated with enforcement, including crime prevention, detection, regulation, and deterrence;
  • threats to public safety and national security arising from the involvement of organized crime in the unrecorded market;
  • public welfare costs, such as medical costs associated with consumption of hazardous products; and
  • the disruption of local economies ― for example, through the distortion of the tax-paid market.

For the alcohol beverage industry, the unrecorded market poses both economic and reputational threats, including:

  • lost revenue for legitimate industry actors;
  • threats to brand integrity and reputational challenges; and
  • erosion of consumer confidence.

The unrecorded market also has problematic implications for consumers, most notably in the form of:

  • threats to health from poisonings and low-quality products;
  • loss of confidence in branded products; and
  • threats to personal safety related to crime associated with the production and sale of unrecorded alcohol.

While many assessments of the unrecorded market focus on its negative aspects, it should be acknowledged that unrecorded alcohol often has a number of positive attributes and associated outcomes. Often, it is closely linked to culture and tradition and provides economic benefits to individual producers and their communities. Despite occasional problems, such unrecorded products are largely of high quality since many producers rely on a loyal customer base and are therefore motivated to maintain the quality of their products.

Understanding the size, composition, drivers of, and outcomes associated with the unrecorded market is of common interest to governments, consumers, and the private sector. However, because researching this market is challenging, our understanding of the unrecorded market is poor in most parts of the world. Globally, attempts to estimate the size of the unrecorded alcohol market have been carried out without consistency in either definitions or methodologies, yielding data of variable quality and comparability.

 

Back

Next