The Philippines registered the second biggest loss in illicit alcohol at $438 million in terms of tax leakage among ASEAN countries, according to a report.
The Intellectual Property Office of the Philippines (IPOPHL) cited this figure in a report titled “Tackling Illicit Alcohol in Southeast Asia” published in September 2022 by the Transnational Alliance to Combat Illicit Trade (TRACIT) and co-authored by the Asia Pacific International Spirits & Wines Alliance, the Alliance Against Counterfeit Spirits and the EU-ASEAN Business Council.
In tax leakage value, TRACIT said the Philippines incurred the second biggest loss in illicit alcohol at $438 million, just a little below the $441 million of Vietnam.
The TRACIT report also warned that the ASEAN “is estimated to be the region with the highest consumption of unrecorded alcohol by 2025.”
Citing data from various sources, the report said Myanmar had the highest share of unrecorded alcohol consumption to total alcohol consumption at 66.7 percent in 2021. For the Philippines, the ratio was at 44.4 percent, placing it together with Malaysia at 5th with the biggest share of unrecorded alcohol out of nine ASEAN countries monitored.
“This has implications on the economic pillar of ASEAN’s Community Vision 2025 that envisions a highly competitive region, with equitable economic development. Moreover, it impairs a number of UN SDGs , including... SDG 9 that looks to promote innovation by guaranteeing protected intellectual property...” the report read.
The consequences in illicit alcohol include health risks, deaths, revenue losses to government and increased financial resources diverted to organized crimes as profits from illicit trade are used to finance other illegal activities.
According to TRACIT, factors triggering illicit alcohol include lack of awareness and inadequate penalties and enforcement, among others.
Putting in place enforcement measures online will be vital as e-commerce is seen to primarily fuel illicit alcohol to its $4 trillion growth in 2022, according to the TRACIT report also co-authored by the Asia Pacific International Spirits & Wines Alliance, the Alliance Against Counterfeit Spirits and the EU-ASEAN Business Council.
As chair of the ASEAN Network of IP Enforcement Experts (ANIEE), IPOPHL Deputy Director General Teodoro C. Pascua said the Philippines will be working closely with ASEAN’s Customs Enforcement and Compliance Working Group (CECWG).
TRACIT also cited the e-commerce Memorandum of Understanding (MOU), which the IPOPHL helps implement, as a best practice in cultivating trust online to deter illicit alcohol trade in the ASEAN region.
The MOU is an agreement among 18 e-commerce platforms, brand owners and industry groups. Signatories aim to establish a code of practice for protecting IP rights online through the development of an efficient notice and takedown procedure and preventive measures.
“The MOU commits platforms to respond in a timely manner, and IP owners commit to taking swift Notice & Takedown steps in attempt to stop counterfeits at source,” the TRACIT report added while noting the MOU’s feedback mechanism.
To recall, the MOU has led to heightened removals of IP infringing posts on Lazada and Shopee, which are both signatories to the effort.
Aside from these platforms, other signatories include Zalora, the American Chamber of Commerce of the Philippines, British Chamber of Commerce of the Philippines, European Chamber of Commerce of the Philippines and Philippine Retailers Association, to name a few.
The partnership is a result of IPOPHL’s collaboration under the UK Prosperity Fund ASEAN Economic Reform Program with the British Embassy and consulting firm Rouse.