The billion-dollar bootleg alcohol trade in Victoria recently uncovered by police

A joint operation by Victoria Police and the ATO looking into crime syndicates creating and selling illegal and dangerous alcohol blends successfully performed its first raid last Saturday 27 April.

The raid, which will likely be the first of many, follows on from two years of undercover investigative work into the black market industry worth more than $1 billion. Collectively, the ATO estimates that Victoria's bootleg alcohol trade reduced its income through the alcohol excise tax by about $700 million over the last year alone.

According to an article published on Saturday to The Age and The Sydney Morning Herald, these crime syndicates have been mixing regular drinking spirits with denatured alcohol used to manufacture paint stripper, brake fluid and synthetic rubber. These concoctions, which are often bottled in empty name-brand bottles, are currently being sold statewide to at least 80 licensed premises. Law enforcement estimates that 2.4 million bottles of illegal alcohol enter the market every year. 

The police announcement is today being used by The Australian Distillers Association in its Brisbane conference as evidence that current taxation rates on spirits is unsustainable for the industry. 

“Just over the weekend, Victorian Police busted a one billion dollar liquor substitution racket that blends dangerous industrial alcohol – like paint stripper and brake fluid – into whisky, vodka and other spirits products,” said Australian Distillers Association President, Holly Klintworth.

“Melbourne’s The Age newspaper reported that organised crime has moved onto bootlegged booze to avoid the high spirits excise, which is now $101.85 per pure litre of alcohol.”

By comparison, one litre of denatured alcohol retails for about $10.

In the article published Saturday, an ATO spokesperson indicated that, whilst some producers and distributors of bootleg alcohol were companies “well-established in the alcohol supply chain,” organised crime liquor operations are currently on the rise.

“The ATO is obviously concerned about the tax leakage and the unfair impact on businesses that do the right thing, as well as the broader community threats, including the health and safety risks inherent in the consumption of illegally manufactured alcohol,” said the spokesperson. 

Ever since the most recent increase to the bi-annual spirits tax on 1 February, key officiating bodies of Australia’s spirits industry have been vocally outlining the un-sustainability of current taxation rates. Data released by the ABS has even proven that spirits taxation rates are directly contributing to inflation. 

The investigation by Victoria Police and ATO will likely produce more news in the near future. Liquor samples seized during the raid are now being tested at the National Measurement Institute, which will forward results onto forensic experts to report on the likely health impacts.