If the price of your favourite spirit seems too good to be true, it probably is
Paul Kirk
Counterfeit alcohol, made to look like genuine Scotch whisky, brandy and gin, is trickling into bottle stores across the country, threatening the lives of anyone stupid or desperate enough to buy a really, really cheap bottle of liquor.
This week liquor industry officials confirmed that stocks of potentially lethal methanol-based liquor are finding their way on to bottle-store shelves from as yet unidentified sources.
The admission came on Wednesday January 31 as Cape Town men Johan van den Heever and Dan Padovitcz began their three-day trial for selling booze made with methanol, food colouring and flavourants.
The pair were arrested last year with others for producing booze made with potentially lethal methyl alcohol. Originally they were due to be charged with attempted murder, fraud and a number of offences relating to the liquor act. The attempted murder charge was dropped.
At the time of their arrest, bootleg booze had become such a major problem that the liquor industry, representing the South African Distillers Conference, the Cape Wine and Spirit Institute and KWV got together with the police, customs officials and the Department of Agriculture and Land Affairs to form the Liquor Industry Combined Investigative Task Team or, quite appropriately, Licit.
The team was put together as bottle stores began to sell bottles of “house” liquor at unrealistically cheap prices. The industry realised that the only way the booze could be sold so cheaply was for the dealers to be dodging duties and taxes.
Says John MacDonald, representative for Licit: “Price wars are a fairly common practice in the liquor industry, but the extent of the price war we saw last year was simply impossible. The excise duty on a bottle of liquor is R10 or more. You simply cannot sell a bottle of whisky for R12 as, after paying excise duty that leaves the manufacturer only R2 to produce the product, to bottle the product, make a label, deliver it and of course make a profit. We realised someone had to be dodging the excise duty somehow.”
Within a short time Licit established that two main methods were being used to avoid excise duty, which is levelled in the country of consumption not production.
Some producers were using methyl alcohol intended for industrial and medical uses to produce beverages. Alcohol intended for these purposes does not carry excise duty, while alcohol intended for human consumption attracts the high levels of excise duty.
Others were buying alcohol intended for human consumption and avoiding taxes by claiming it was for export. Alcohol bought this way was being reimported into South Africa without any excise duty being paid.
Another scheme saw the alcohol siphoned off while in a bonded warehouse and replaced with water. The alcohol is then sold on the domestic market without excise duty having been paid while the water was sent on a rail trip to a neighbouring country.
Licit was formed as bootleggers across the country robbed the country of millions in lost taxes and threatened the health of drinkers. Methyl alcohol is a known killer. Late last year dozens died in Kenya as cheap booze laced with methanol hit the streets. In South Africa no deaths have been recorded yet but MacDonald could not rule out the possibility that some people had died after drinking the counterfeit booze that hit the market last year.
“If someone expired after drinking this stuff, it is possible that nobody would connect their death to the cheap booze they had consumed,” says MacDonald.
“Fortunately we got on top of the methyl-based alcohol situation. But once again we are finding the odd bottle turning up in stores across the country. Someone is producing the stuff again, though not in the volumes it was being made in last year.”
MacDonald advises drinkers to avoid impossibly cheap bottles of liquor no matter how great the temptation. He said the producers were targeting markets across the income range.