Irrespective of the progress the wines and spirits sector has attained over the years, industry analysts believe the sector is still being held back by some critical challenges, debarring it from progressing beyond its current position.

One of the major debacles is the issue of illegal activities within the sector, specifically the increasing incidences of illicit trade, which seems to have defied all possible solutions.

Sadly, this development is also rubbing off on the Federal Government’s supposed revenue. According to the Spirits and Wines Association of Nigeria (SWAN), Nigerian government forfeited an estimated N428b in revenue due to these illegal activities within the sector.

Across Nigeria, wines and spirits are familiar features of daily – at weddings, birthdays, naming ceremonies, business engagements, and weekend gatherings, playing a vital role in moments of connection, celebration, and shared experiences.

But this development, which poses as serious risks to public health, revenue of practitioners, legitimate businesses and even government has begun to gradually send many of the industry players out of the business.

According to a survey carried out by Euromonitor in 2024, the level of illicit trade in spirits and wines in Nigeria was about 40 per cent, which suggests that for every five bottles sold, two were from illicit trade, which gives a sense of how large the impact of the heinous act is.

It was this threat that prompted the drive by the umbrella body of the industry – SWAN to sanitise the industry. This move is basically due to the fact that illicit trade in the industry is associated with economic crimes such as tax evasion, smuggling, counterfeit packaging, market distortions and revenue losses.

SWAN is the industry body comprised of businesses involved in the manufacturing, importation, distribution and marketing of spirits, wines and other forms of alcohol in Nigeria. Its main vision is to be recognised for its commitment to sanitising the alcohol market in Nigeria, while promoting best practices and high ethical standards.

One of the immediate steps was to organise a summit, to bring together all sector players, individuals, agencies and corporate bodies involved in the spirits and wines value chain.

At the high-level workshop, held at the Continental Hotel, Abuja, the key players across the value chain, unanimously expressed their resolve to combat fake and adulterated alcoholic products threatening lives and their livelihoods.

Apart from regulatory agencies, law enforcement bodies, manufacturers, distributors, legislators, senior media practitioners, the diplomatic community and international organisations, including Interpol and the Alliance Against Counterfeit Spirits (AACS), were also represented.

Made up of notable organisations including Bacardi, Brian Munro Limited, Diageo, Guinness Nigeria, Moët Hennessy, Nigerian Bottling Company, Nigerian Breweries, Pernod Ricard Nigeria and William Grants & Sons, SWAN believes that fragmented enforcement cannot defeat organised criminal networks, especially with the coordination of counterfeit syndicates observed over time.

According to the body, illicit trade exposes weaknesses in regulation, enforcement, border control and market surveillance, while Nigeria’s porous borders continue to fuel smuggling, allowing untaxed and unverified products to enter the market.

The conclusion at the workshop indicates that the Standards Organisation of Nigeria (SON), the Nigeria Customs Service (NCS), the National Agency for Food and Drug Administration and Control (NAFDAC), and the Federal Competition and Consumer Protection Commission (FCCPC) and other stakeholders have critical roles in combating illicit trade.

In his opening remarks, the Managing Director of Pernod Ricard and President of SWAN, Michael Ehindero, described illicit trade as a direct threat not only to business integrity but to human life. He noted the urgency of collective action while rallying key players in the industry against the menace.

“Illicit trade, defined as the production, importation, or sale of goods outside regulatory frameworks, continues to pose risks to consumer protection, government revenue, and legitimate businesses.

“This includes counterfeiting, smuggling, illegal production, tax evasion, and the diversion of legitimate products into unauthorised channels. It is a global challenge that cuts across multiple sectors in the consumer goods industry, food and beverages, pharmaceuticals, tobacco, cosmetics, and alcohol, with significant consequences for public health, government revenues, and economic development.

According to him, counterfeiters are increasingly replicating trusted brands, producing and distributing illicit products outside regulated systems, while smuggling and parallel imports continue to bypass safety checks and taxes.

“Beyond the human cost, illicit trade has a devastating impact on our economy. Governments lose billions in tax revenue, funds that should be supporting education, healthcare, infrastructure, and public safety. Legitimate businesses that invest in compliance, quality, and employment are unfairly undercut. Jobs are lost. Investor confidence is shaken. This is not a victimless crime, it weakens entire value chains and slows national development,” he added.

Speaking on the drivers of the problem, the SWAN President said illicit trade is not unique to the industry and is fueled by multiple factors. “Illicit trade is not specific to this industry. It is a pervasive issue. We have heard other industrial associations make the same issues and complaints. Consumer demand for cheaper alternatives, regulatory lapses and taxation pressures are the contributing factors.

“There is an incentive for people to cheat or engage in unsafe practices. Because it is a business, people often seek cheaper alternatives. That desire for lower-cost products also drives the growth of these illicit businesses. There are also systemic issues, including possible regulatory lapses. It happens,” he noted.

Also speaking at the event, the SWAN Director-General, Tony Okwoju, called for stronger stakeholder-led enforcement against illicit trade due to its impact on lives, legitimate business and government revenue.

He added that the trend has major implications for government revenue, noting that illicit operators do not pay taxes. Okwoju also noted the ongoing collaboration between industry players and regulators, including the NAFDAC.

“Our members are continually collaborating and engaging with the enforcement agencies, not just NAFDAC, with a view to working together to fight this. It is a continuum,” he said.

Providing a global perspective, the Managing Director of the Alliance Against Counterfeit Spirits (AACS), David Francis, highlighted the increasing sophistication of counterfeit operations, noting that fake packaging materials are often mass-produced abroad and shipped into local markets.

“They’re becoming organised into gangs, well-organised networks and becoming really sophisticated. The quality of the things we are seeing coming from China into this market are making it increasingly challenging for consumers to spot fake goods, whether they’re bad or good, or whatever the fundamentals are.

“So, you’ll see the labels, you’ll see the cartons, you’ll see the bottles, and you’ll see the caps. This is a do-it-yourself counterfeiting kit coming into the domestic market. All you need to find is the liquid. And we all know that the liquid is relatively easy to source in any domestic market around the world. So again, I just want to highlight how important it is that we stop these things getting into the market,” he said.

Francis explained, “When we are talking about illicit trade and those headline numbers, that includes tax-evaded, smuggled and parallel products.

“Counterfeit is a subsection of that, with particular dangers related to unregulated production. Counterfeit is a smaller subset of the overall illicit market. It is important to bear that distinction in mind,” he said.

Also speaking, Kingsley Uranta, a media expert, called for stronger investigative journalism to expose the networks behind illicit trade, stressing that the problem is both widespread and deeply entrenched.

At the regulatory level, agencies acknowledged the growing threat of illicit trade while outlining ongoing interventions. The FCCPC described the situation as a serious public health and economic challenge.

In his keynote address, the Executive Vice Chairman of FCCPC, Tunji Bello, warned that illicit alcohol trade is a “multi-dimensional crisis” affecting consumer safety, market integrity, and public revenue.

“It is not merely an industry problem,” Bello said, stressing that the issue touches on “consumer protection, health protection, public revenue, public safety, and indeed the overall integrity of our market.

An Assistant-Comptroller of Customs, Kolapo Oladeji, who represented the service, pointed at ongoing efforts to combat smuggling and strengthen border controls while also calling for improved policy frameworks.

According to him, the agency plays a critical role in the wines and spirits industry through licensing local manufacturers and collecting excise duties, while also enforcing fiscal policies for the Federal Government.

“Today, we are faced with smuggling activities, we are faced with tax evasion, we are faced with counterfeiting, and products smuggling, competing with the local manufacturers, who are paying their taxes regularly,” Oladeji asserted, while stressing the need for stronger regulatory and legal frameworks, improved tax policies, and enhanced border control and enforcement to curb illicit trade.

Other governmental bodies, including the SON and the NCS, reaffirmed their commitment to enforcement, but stressed that a unified, multi-stakeholder approach is essential to combat the menace.

“SON, in line with its mandate, remains firmly committed to setting and promoting standards that ensure the quality and safety of alcohol and drinks in the Nigerian market.

“However, tackling illicit trade requires a coordinated, multi-stakeholder approach. No single institution can address these challenges alone. Effective enforcement, intelligence, determination, industry compliance and consumer awareness and transparency mechanisms must work together if we are to achieve lasting results,” Ishaku Mohammed, said on behalf of the agency.

Deliberations at the workshop produced a range of recommendations, including the creation of a formal multi-stakeholder coordination platform, intelligence-led enforcement strategies, increased investigative journalism and the strengthening of laws.

Participants also emphasised the need for sustained public awareness campaigns, whistleblower mechanisms, and tighter supply chain controls.

With SWAN declaring an all-out offensive against illicit trade and stakeholders pledging sustained collaboration, there is cautious optimism that the Abuja engagement marks a turning point.