As a result of the restrictions on mobility and the ban on the sale of alcoholic beverages, which were decreed in 2020 to mitigate the outbreak of covid-19, it is estimated that the smuggling of liquor from Mexico into the Guatemalan market increased considerably.
According to the report Prohibitions, illicit alcohol and lessons to be learned from the covid-19 lockdown, prepared by the Transnational Alliance to Combat Illicit Trade (Tracit), the dry law imposed for long periods boosted sales of smuggled alcoholic beverages.
A bill is being considered in Costa Rica that proposes to identify each container of this type of beverage with a device, label or sticker in order to prevent smuggling, a measure that, according to business people, would not be effective.
Given the crisis in the region, businessmen in Guatemala report that smuggling of Mexican products has increased, while in Panama, beer producers attribute the rise in illegal trade in alcoholic beverages to the dry law.
With the spread of Covid-19, governments in Central America have decreed mandatory quarantines and have also restricted the movement of consumers at certain hours.
In Costa Rica, a bill is being discussed that seeks to combat adulteration and smuggling of alcoholic beverages, but the business sector believes that if approved, the result could be an increase in illegal trafficking.
The project called "Law against adulteration and smuggling of alcoholic beverages", proposes the use of technological tools to combat smuggling, imitation and adulteration of alcoholic beverages.
In Guatemala, food and beverage businessmen estimate that product smuggling during the end of 2018 will increase more than reported in previous years.
Complaints by Guatemalan businessmen regarding the illicit marketing of different types of products have been a constant in recent years. Long-standing calculations detail that of every ten products sold in the country, three are of illegal origin.
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.
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%.
Guatemalan businessmen are demanding stricter laws to combat the illegal entry of goods from Mexico, which are now being sold in El Salvador and Honduras.
Food and beverage companies say that in the municipality of Acajutla, El Salvador, it is possible to buy oil, flour and crackers that were illegally smuggled in from Mexico, first passing through Guatemalan territory, and eventually being sold on Salvadoran soil.
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. The obvious difference in prices and growing demand for the product due to the proximity of the holiday seasons are the main factors that contribute to an increase in alcohol smuggling in Honduras at this time of year.
One out of every five bottles of liquor consumed in the country comes from the illegal market, which moves $64 million and is growing by 30% every year.
The easy availability of raw materials and the lack of regulation on the end use of these products, leads to one out of every five bottles of liquor consumed in the country being illegal, absorbing 23.5% of the total spirits market in terms of volume and total sales.
Up to 15% of the market in products such as cigarettes, liquor, drugs and footwear, is supplied with goods whose origins are illegal.
Added to the list of products that have traditionally been traded illegally, such as cigarettes and alcoholic beverages, there is an increasing tendency to smuggle medicines, shoes, clothing, and beauty and personal care products, among other things.
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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