It has been reported that six out of ten bottles of liquor consumed in Costa Rica are of illegal origin, and this situation has been attributed to the heavy tax on alcoholic beverages in the country.
Thursday, September 6, 2018
An investigation published by Crhoy.com details the figures on the market of illegal alcoholic beverages in Costa Rica.The document concludes that between 2014 and 2017 the value of the illicit liquor market has grown almost 50%.
Crhoy.com reports that "...The research indicates that between 2014 and 2017 there is a growth of 48% in the value of the illicit liquor market. According to the Euromonitor study, contraband liquor is responsible for tax evasion of $94 million to the country, which corresponds to 0.15% of the Gross Domestic Product (GDP); In addition, there was an 11% increase in the presence of counterfeit products in the market in the indicated period."
Gerardo Lizano, brand safety consultant, explained to Crhoy.com that "... it is important that there be a transparency of economy regarding the issue of illicit trade, and the degree to which governments exercise their border areas."
It has been estimated that the alcoholic beverage industry has lost out on earnings of $92 million in annual sales due to the entry of illegal and fake products.
While the sector failed to earn about $92 million, according to estimates Euromonitor reported by Prensalibre.com, the Guatemalan treasury has forgone about $25 million in uncollected taxes.
The value of illegal sales of about 32,000 hectoliters of pure alcohol in the country each year is estimated at $54 million.
Growth in the volume traded on the illicit market has been increasing, with the exception of the period between 2012 and 2013, when it went down by 3.7% due to "... greater government control on ethanol, specifically in control of pharmacy alcohol and counterfeit or adulterated alcohol. "
Liquor distribution companies are demanding that the government improve measures to control the illegal entry of spirits, particularly from Nicaragua.
The cost of a box of 24 units of Nicaraguan liquor ranges from $13.50 to $14, while in the Honduran formal market the same amount costs between $19 and $26.50.
Costa Rica has the largest share of illegal liquor in the market of all the countries in Central America with 22%, while the average in other countries in the region is 8%.
Costa Rica also ranks among the top five countries in Latin America for having the most bootleg liquor in their markets, according to a study prepared by Euromonitor International for the Association of Producers and Importers of Alcoholic Beverages in Costa Rica (Apibaco).
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