In May 2024, The WSA participated in a high-level panel hosted by the World Trade Organization on “Illicit Trade in Food and Food Fraud”. This timely event brought together global stakeholders to examine how illicit trade threatens food safety, public health, and the global economy — including the growing threat posed by illicit alcohol.
The panel featured:
- Ngozi Okonjo-Iweala, Director-General of the WTO (Opening Remarks)
- Helen Medina, CEO, World Spirits Alliance (WSA)
- Jean-Marie Paugam, Deputy Director-General WTO
- Ambassador Chenggang Li, Permanent Representative of China to the WTO
- Ambassador Usha Chandnee Dwarka-Canabady, Permanent Representative of Mauritius to the WTO
- Jeffrey Hardy, Director-General, Transnational Alliance to Combat Illicit Trade (TRACIT)
- Doaa Abdel-Motaal, Senior Counsellor, Agriculture and Commodities Division at the WTO (Moderator)
Illicit Alcohol: A Global Threat
Illicit trade in spirits is one of the most harmful and pervasive forms of food fraud. According to World Health Organization (WHO), 1 in every four bottles of spirits is illicitly traded, primarily through smuggling, fraudulent activities and tax evasion. These practices:
- Undermine legitimate businesses and producers.
- Endanger public health.
- Deprive governments of billions tax revenues.
The WTO report highlights that alcoholic beverages rank among the most targeted food products for fraud, with an estimated US$8.9 billion in fiscal revenue lost each year due to illicit alcohol alone.
Trade Policy, Taxes, and Illicit Markets
The industry sees a strong correlation between excessively high tariffs or poorly designed domestic tax regimes and the rise of illicit alcohol trade. Illicit operators are opportunistic — they gravitate toward markets with the highest profitability, often where regulatory systems are outdated or mismatched to local realities.
How the WTO Can Help
The WTO rulebook already offers tools to address illicit trade:
- The Technical Barriers to Trade (TBT) Agreement helps ensure truthful labeling and reduces consumer deception.
- The Trade Facilitation Agreement streamlines customs procedures and reduces red tape, limiting the chances for illicit goods to enter supply chains.
- The TRIPS Agreement supports enforcement of trademark and geographic indication protections, vital in combating counterfeit spirits.
Looking Ahead
WSA is committed to continuing its engagement with the WTO and international partners to advance targeted, evidence-based solutions to combat illicit alcohol trade. As noted in the WTO publication, the fight against food fraud and illicit trade requires multi-stakeholder cooperation, proactive enforcement, and modern, balanced regulation. The WTO event marked an important step toward building a safer, fairer global trade environment – one in which legitimate spirits producers can thrive and consumers are protected.
