Distillers want tobacco-style crackdown on smuggled spirits
Tuesday, 23 December 2025
Spirits NZ says it will “fire up” its “Label It Right” campaign next year in a bid to fight back against illegal liquor smuggling.
The peak industry body for the spirits industry feels left out of the discussion on illicit smuggling and organised crime, which has focused on cigarette smuggling estimated to be costing $600 million in lost excise tax each year.
Excise tax rises with inflation, and that ran hot in 2021, 2022 and 2023 as a result of Covid-pandemic disruption to global supply chains and high government spending.
Spirits NZ chief executive Robert Brewer said: “We estimate up to $30m per annum in excise is being dodged at the border through illegally imported full-strength spirits.”
But he admitted that was a “back of an envelope” calculation and the real figure was unknown.
Globally, illicit trade in spirits has ramped up so much that around a quarter of alcohol consumed is “illicit”, according to the World Spirits Alliance, which is a body funded by the alcohol industry.
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It claims that included smuggled alcohol, bootleg alcohol and counterfeit products, made and bottled to fool consumers into thinking they were buying the real thing.
In some countries the proportion of alcohol sold that is illicit may be higher, or lower, however.
A report by World Spirits Alliance estimated it could be as high as 28.5% in Thailand, and 14.6% in Brazil.
Brewer said the average for western countries was 17%.
Excise tax had risen 26% in the past five years, Brewer said, which had added impetus to smuggling. .
“It’s just simply the economics of crime. If you can get across the border a container-load of spirits claiming it is something else, and you can skip the excise tax, you are banking 40% to 50% of the retail value,” Brewer said.
Around 40% to 50% of the retail price of a bottle of spirits was excise tax.
Prosecutions are rare, and Spirits NZ believes they are just “the tip of the iceberg”.
In 2024, an Auckland liquor importer was fined $244,000 for trying to sell alcohol with labels that did not meet New Zealand legal requirements.
Spirits NZ would like to see greater enforcement to crack down on illicit alcohol sales, though it believed Customs was becoming better at intercepting illegal alcohol.
But while illicit cigarettes were a big focus of Customs in its 2025 annual report, including highlighting a 2½-year sentence for a Christchurch cigarette smuggler, alcohol smuggling was not mentioned.
“The key thing is what’s happening with tobacco is happening with spirits,” Brewer said.
The World Spirits Alliance said in its report the most efficient way to tackle illicit trade was for the public and private sectors to work together through cooperation, intelligence sharing, and education campaigns.
The Label It Right campaign was aimed at retailers with its website enabling them to enter details of suspect bottles offered to them to check whether it was legitimate.
Information gathered through the website was passed to the Ministry for Primary Industries, which polices labelling requirements on alcohol.