The effects of the illicit trade in alcoholic beverages on the economy, the market and consumers

More than 5 million bottles of alcoholic beverages are trafficked every year in Greece, causing damage of hundreds of millions of euros in the revenues of the Greek state and posing significant risks to public health.

The threat to businesses and consumers but also the economy from the illegal trade of alcoholic beverages is pointed out by the Association of Greek Producers of Spirits & Distilled beverages, saying that in recent years the issue of alcoholic beverage smuggling has been taken over by organized crime and has emerged as a major issue due to high taxation.

The negative effects of the illegal trade in alcoholic beverages on public revenues, legal entrepreneurship and consumer safety, were a common conclusion and basis for a recent meeting organized by the Hellenic Police Headquarters in collaboration with the Coordinating Operations Center of the Independent Public Revenue Authority. Representatives of the spirits industry highlighted the size of the isue. It is characteristic that according to estimates of the World Health Organization, the illegal trade in alcoholic beverages in Greece amounts to 11% of total consumption.

This means that about 5 million bottles are distributed without paying VAT and other taxes, with the loss of revenue from alcoholic beverages amounting to 31 million per year (according 2020 data), only from alcoholic beverages excepting bulk spirits (tsipouro and tsikoudia) where the problem is more acute.

At the same time, VAT losses are even more significant as the main quantity of illegally trafficked beverages is channeled to the local market, with VAT losses estimated at between 28 and 45 million euros.

According to the president of the Association of Alcoholic Beverages, Mr. Isidoros Revach, “there is a mutual interest in the fight against smuggling, as the fight against it concerns us all”, while underlining the reduction of taxation on alcoholic beverages is the “only solution for the fight against smuggling” since the high levels of taxation in Greece give “space and incentive to illegal trade and tax evasion”.

The importance of addressing the issue is also pointed out by the President of the producers organization, Mr. Nikolaos Kalogiannis, according to whom “the organized smuggling of bulk spirits has become a major problem for the Greek production sector and should now come under some regulation in favor of the national economy but also of production. It devalues ​​the reputation and quality of the Geographical Indications for which the State and the distillers have fought in the European Union, endangers the health of the consumer, degrades the tourist package of services of the country, but also the possibility of exporting branded bottled spirits ” .

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