Illicit alcohol continues to pose a significant threat to public health, government revenue, and legitimate businesses in Tanzania. A new study reveals that 61% of all alcohol consumed in the country is illicit, resulting in an estimated TZS 1.026 trillion in government revenue losses each year due to uncollected taxes.

Similar studies conducted by Euromonitor International in Kenya and Uganda in 2025 revealed comparable trends, with illicit alcohol accounting for 60% and 67% of total consumption, respectively.

For the study, illicit alcohol is defined as alcohol that does not fully comply with tax, regulatory, and legal requirements. This includes products for which relevant excise and other duties have not been paid, alcohol that lacks mandatory health permits, or products that fail to comply with local laws and production standards, including approved ingredients. Illicit alcohol also includes informal distribution through unlicensed outlets, which in developing countries can represent a significant share of the alcohol market across categories.

Illicit alcohol is widespread across all segments, including spirits, beer, and wine. Illegal artisanal brews or traditional alcoholic beverages, such as Mbege, Komoni, Wanzuki, Ulanzi, Dengerua, among others, account for the majority of illicit consumption. While these products hold cultural significance, their popularity is largely driven by affordability. For example, Gongo, which is prohibited, can be up to 80% cheaper than legal spirits. Counterfeit and smuggled alcohol also remain a persistent challenge, particularly within the spirits and beer categories.

Beyond economic losses, illicit alcohol poses serious risks to consumer health. Unsafe production practices and the potential contamination with toxic chemicals significantly increase health hazards. These risks have intensified as the illicit alcohol market continues to grow faster than the legal alcohol sector.

It is within this context that the study was conducted to provide a clear and comprehensive picture of the scale of the problem and how it has evolved over time. The research was carried out by Euromonitor International on behalf of the Confederation of Tanzania Industries (CTI), in collaboration with Serengeti Breweries Limited (SBL). The study compares the current situation with 2017 levels, when illicit alcohol accounted for 55% of total consumption and examines the sources and dynamics of the illicit alcohol trade in Tanzania.

Speaking during the release of the study findings, the Deputy Minister for Industry and Trade, Honourable Dennis Londo, said the data highlights a challenge that requires urgent and collective action.

“The loss of more than TZS 1 trillion every year due to illicit alcohol undermines the Government’s ability to finance essential social services and protect the health of citizens. This study provides critical evidence to inform policy decisions and strengthen collaboration between the Government and stakeholders,” said Honourable Londo.

According to the study, the largest share of revenue loss is driven by illegal artisanal brews, commonly known as gongo, which alone account for an estimated TZS 709 billion in annual losses. Additional losses arise from counterfeit alcohol, smuggled products and tax leakage, where excise duties are underpaid or completely evaded.

The Executive Director of CTI, Leodegar Tenga, noted that the lack of reliable data on illicit alcohol was a key reason for commissioning the study, given that the trade operates covertly and outside formal systems.

“Without reliable data, it is difficult to design effective interventions. This study was commissioned to close the information gap, reveal the true scale of the problem, and support the Government and other stakeholders in taking evidence-based action,” said Tenga.

Explaining the credibility of the findings, Benjamin Rideout, Euromonitor International consultant, said the study employed a mixed research methodology to ensure the results accurately reflect market realities.

“Because illicit alcohol is not captured in official systems, we relied on extensive field research, stakeholder interviews and consumer surveys to build a comprehensive and comparable picture of the market over time,” said Rideout

From the private sector perspective, Serengeti Breweries Limited noted that its collaboration with CTI reflects a responsibility to protect consumers and support fair competition.

“Illicit alcohol endangers consumers’ lives, reduces government revenue, and undermines businesses that comply with the law. Our participation in this study contributes to strengthening evidence-based dialogue and supporting the development of sustainable solutions,” said Obinna Anyalebechi, Managing Director of Serengeti Breweries Limited.

The study also finds that while many consumers are aware of the health risks associated with illicit alcohol, factors such as lower prices, easy access through informal channels, and social acceptance continue to drive consumption.

In response, the study recommends strengthening ethanol regulation, enhancing border and internal enforcement, increasing consumer awareness, and expanding the use of technology such as tax stamp verification systems to curb the illicit alcohol trade.