Estimating Unrecorded International Trade of Alcohol and Forgone Revenue in Bangladesh

Abstract

This study attempted to estimate the value of unrecorded liquor trade in Bangladesh. In addition, tried to estimate the revenue government lost through unrecorded liquor trade. Globally, a significant share of liquor trade takes place through informal or illegal channels and remain unrecorded. In Bangladesh, average annual per capita alcohol consumption reached 0.9 liters in 2016. About 3.5% of the male and 1% of the female adult Bangladeshi population regularly intake alcoholic beverages. Estimated demand for liquor in Bangladesh was nearly 2.5 million liters in 2016, whereas, legally permitted level of consumption was only 0.10 million liters. As both production and import of liquor is highly regulated, trade through informal channels meet the excess demand in Bangladesh. In this paper, using official data from the Department of Narcotics Control (DNC), Bangladesh, we estimate the market value of unrecorded liquor production and trade. We find that the estimated annual value of unrecorded consumption of liquor from domestic production is nearly between USD 11 million and USD 28 million; while, unrecorded trade of liquor is nearly between USD 120 million and USD 190 million. Hence, the government is losing potential revenue equivalent to about USD 0.9 million to USD 2.2 million at production stage and USD 9.5 million to USD 15.2 million at import stage.