Illegal alcohol is flooding parts of Victoria, with new research and enforcement data revealing that a significant share of bottle shops may be stocking unregulated or illicit spirits, raising serious concerns about public health, tax evasion and organised crime links.
A Nine News investigation, drawing on research from the National Drug Research Institute (NDRI), found that around 30 per cent of bottle shops surveyed were selling suspected illicit alcohol products, with no postcode across metropolitan or regional Victoria found to be free of at least one retailer stocking the goods.
Researchers say the illicit market is “taking off” in Victoria, with more than 100 stores visited over the past year and at least 30 found to be carrying multiple unregulated alcohol varieties, in some cases up to 14 different products.
Authorities are also investigating whether illegal alcohol may be connected to a recent spate of attacks on hospitality venues in Melbourne, as well as a distribution centre, further raising concerns about the scale and reach of the trade.
The Australian Tax Office (ATO) estimates the shadow alcohol economy cost the nation around $767 million in lost excise revenue in 2023-24, accounting for almost 10 per cent of all alcohol duty collected. Officials say the scale of the loss highlights how deeply entrenched illegal supply chains have become.
Experts warn that the problem is not just economic, but potentially dangerous. The ATO has previously tested suspected illicit alcohol products and found evidence of harmful chemical additives, including industrial denaturants not intended for human consumption.
NDRI alcohol policy expert Dr Nic Taylor told ABC News that illicit alcohol is entering the market through multiple channels, including smuggled imports, under-reported domestic production, and unlicensed distilleries operating entirely outside regulation.
He said the third category poses the greatest health risk. “These retailers who have these products are under no obligation currently to know who they’re purchasing the alcohol from,” Dr Taylor said.
“That obviously needs to be rectified.”
Consumer advocates and industry bodies are also warning that the lack of traceability in parts of the supply chain is allowing unsafe products to circulate alongside legitimate brands, making it difficult for consumers to distinguish between legal and illegal stock.
The Victorian Alcohol and Drug Association said the rise of unregulated alcohol presents a “whole range of health issues”, particularly given the potential for contamination in cheaply produced spirits.
Chief executive Chris Christoforou told ABC News that the issue is placing additional pressure on an already stretched health system, while alcohol industry groups say they have raised concerns for years with limited enforcement action.
Australian Distillers Association general manager Kylie Lethbridge said illicit alcohol is increasingly appearing in venues across the state, including pubs and nightclubs, with reports of people becoming ill after consumption.
Dr Taylor said weak regulation and limited enforcement remain key drivers of the problem, arguing that retailers should be required to verify the origin of alcohol more rigorously.
He also warned consumers to be cautious, pointing to signs that may indicate illicit products, including unusually low prices, inconsistent fill levels between bottles, and missing labelling details such as batch numbers or warning statements.
“I would look for brands that you know of and that you trust.”
Authorities have previously taken action against large-scale illicit alcohol operations in Victoria, including a 2024 raid on a billion-dollar network allegedly supplying unregulated spirits to more than 80 licensed venues across Melbourne and regional areas.
While illicit tobacco has become widely recognised as a major black market problem in Australia, officials and researchers now warn that alcohol may be following a similar trajectory, with increasing sophistication in distribution and concealment methods.
Police and the ATO continue to investigate supply chains and potential links between illegal alcohol distribution and wider criminal activity across the state.
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