When the Spirits and Wines Association of Nigeria (SWAN) gathered regulators, policymakers and enforcement agencies for a one-day workshop in April, the purpose was not to catalogue an industry鈥檚 losses. It was to argue that illicit trade in spirits and wines has outgrown the category that produced it.
The diagnosis is not in dispute. Tony Okwoju, SWAN鈥檚 Director-General, estimates the annual revenue loss to government at 鈧428 billion, arising from smuggling, counterfeiting, tax evasion and products circulating outside regulatory channels. He cited a 2024 Euromonitor survey estimating that illicit products account for about 40 per cent of spirits and wines sold in Nigeria, two in every five bottles. Each represents excise duty, customs revenue and VAT forfeited while compliant manufacturers pay all three. Counterfeit products, a smaller share of the illicit market, carry most of the danger, being made entirely outside controlled manufacturing systems.
SWAN President Michael Ehindero put it plainly. 鈥淚llicit trade in spirits and wines is not just an industry issue; it has assumed a national concern.鈥
The law is not biting
Nigeria has no single anti-counterfeiting statute. Enforcement is spread across the Merchandise Marks Act, the Trade Malpractices Act, the Counterfeit and Fake Drugs Act, the Customs Service Act 2023 and the FCCPC Act 2018, each with its own agency and procedure. The penalties are the deeper problem. The Merchandise Marks Act dates from the colonial era and has never been substantively amended. The Trade Malpractices Act sets a minimum fine of 鈧50,000. The Counterfeit and Fake Drugs Act caps the fine for manufacturing or distributing counterfeit products at 鈧500,000, though it also provides for five to fifteen years鈥 imprisonment. Against a 鈧428 billion market, a half-million-naira ceiling is not a deterrent; it is an operating expense.
There is a clear need for the National Assembly to review the laws on counterfeiting, smuggling and adulteration, raising penalties to a level proportionate to the trade and closing the gaps between overlapping statutes.
Enforcement without coordination
Nigeria does not have a single body coordinating enforcement against illicit goods. NAFDAC, the Standards Organisation of Nigeria, Customs, the FCCPC, the Police, the EFCC and the revenue authorities each hold part of the mandate; none holds all of it. One consignment of counterfeit products may involve a forged trademark, an unregistered product, an evaded excise liability and a laundered payment. Investigated separately, it yields five partial cases; jointly, one prosecutable network.
Operation OPSON (an international law enforcement initiative to combat counterfeit and substandard food and beverages worldwide), coordinated by INTERPOL and Europol, works precisely by assembling police, customs, regulators and industry into a single framework: in its tenth round, 72 countries ran close to 68,000 checks, seized more than 15,000 tonnes of illicit product and opened over a thousand criminal cases, with alcoholic drinks the most frequently counterfeited category. The Transnational Alliance to Combat Illicit Trade (TRACIT), an independent, non-governmental, not-for-profit organization under US tax code 501(c)(6) that focuses on reducing the global harms of illicit trade, urges governments to appoint a national coordinator and a permanent inter-agency task force. Nigeria鈥檚 Customs Service has said much the same. What is missing is not willingness but a mandate.
Here again, there is a need for the Presidency to establish a standing inter-agency mechanism against illicit trade, with a national coordinator, a shared intelligence platform, joint operational targets and published reporting.
The fiscal question
A third factor sits inside government. This is not an argument against excise duty; it is about calibration. Under measures effective 1 July 2026, spirits attract 30 per cent ad valorem plus 鈧75 per litre, rising to 鈧85 by 2028; wines attract 25 per cent plus 鈧70; beer moves from 鈧72 to 鈧80, on top of currency depreciation and compressed purchasing power. Where legal products move out of reach, demand migrates. Analysis from an earlier Nigerian excise review found spirits and wines here highly price-sensitive, with the low-price segment carrying most of the volume, and warned that a disproportionate price rise could push consumption into the illicit market. Unrecorded alcohol is estimated at around 63 per cent of consumption in Kenya and 50 per cent in Ghana.
An increase imposed without regard to affordability and enforcement capacity raises the rate while shrinking the base. Tax policy here is an enforcement variable, not merely a revenue instrument; future adjustments should be evidence-led, phased and assessed for their effect on illicit substitution before they are gazetted.
An industry can secure its supply chain, authenticate its products and educate its consumers. It cannot legislate penalties, direct agencies of state to share intelligence, or set excise policy. Those levers belong to the National Assembly, the Presidency and the fiscal authorities. Two in every five bottles is the measure of how long they have gone unused.
