Zambian Breweries has applauded the ZRA for stopping smuggled beer entering the country

Zambian Breweries has applauded the Zambian Revenue Authority for its recent action to thwart smuggling of almost K1 million worth of alcoholic beverages at border posts.

The company’s Country Director Jose Moran said his company is pleased to learn of the recent action by the ZRA in confiscating smuggled alcohol worth almost K1 million.

Mr. Moran said this is a step in the right direction in curbing the colossal sums of evaded tax and ensuring a level playing field for businesses and consumers.

He said this commendable action by ZRA confirms the existence of smuggling being rampant in Zambia’s border posts and boundaries and concerted efforts by all stakeholders are cardinal in curbing this scourge.

In October Zambian Breweries launched the 2018 Euromonitor market analysis of illicit alcohol in Zambia, which catalogued an appalling fiscal loss of US$103.7 million compared with US$38 million in 2014 through the smuggling of ethanol and finished alcoholic beverage products into Zambia.

According to the report, smuggled alcoholic goods range from premium spirits, sparkling wine, cider and clear beer brands usually sold cheaply at wholesale markets and also distributed directly by smugglers through trade channels.

“Throughout the ages, wherever there are borders and taxes, there has been smuggling, as unscrupulous traders attempt to dodge duties and procedures in favour of a quick profit. It’s a simple formula: if you can avoid paying customs duties and taxes then you can undercut the market price of goods or – more often – sell at the market price and pocket the difference,” said Mr Moran.

He said the 2018 Euromonitor report explains that there are different categories of organised smugglers including small traders who bypass border checkpoints completely and represent the majority of smuggled alcohol volume originating mainly from Namibia, Tanzania, Malawi and South Africa.

Mr. Moran said the large-volume smugglers mainly cross from Namibia at the Katima Mulilo border with the large illicit traders believed to falsely declare their merchandise at Customs and may proceed into Zambia using cartels that organise them, according to industry sources cited by the report.

The report names townships such as Matero, Mandevu and Chilenje in Lusaka as competing with COMESA Market in distributing smuggled alcohol and other illicit products.

The cholera clean-up conducted by the authorities from September 2017 to January 2018 resulted in many open stalls around COMESA Market, the largest wholesaler market, being removed.

Unfortunately, large amounts of smuggled alcoholic beverages are substituted or refilled and some of Zambian Breweries’ regional and global brands have been affected on the pretext of importation.

As a responsible brewer, Mr. Moran said Zambian Breweries has backed the National Alcohol Policy, which calls for targeted action in solving alcohol issues. The company pledged support by encouraging licit business along the value chain and partnerships with its stakeholders in providing well-researched and informed pragmatic recommendations to the authorities to ensure the complete removal of smuggling.

Mr. Moran also emphasised the need for private and public partnerships to help solve the problem, under which government and industry can pool resources, expertise and intelligence to develop workable solutions.