Alcoholic Beverages

• Limited documentation is available on risks related to the direct production of alcoholic beverages –which includes the brewing, fermentation, distillation, and bottling process. Where risk has been documented in those production modes, it appears to be largely concentrated amongst small producers not participating in global supply chains. That said, significant risks have been documented in a number of raw material inputs to alcoholic beverages including the production of grapes and sugarcane, as well as in the supply chains of glass and plastic bottles. Therefore, downstream companies with alcoholic beverage supply chains should conduct comprehensive supply chain mapping and discovery to target further due diligence efforts.
• Traceability is already used in alcohol supply chains to support origin and quality claims and to protect against fraud.¹Beverage Industry, Laetus, https://www.laetus.com/en/industries/beverages. High quality, permanent coding: ensuring traceability for the spirits industry, edding, https://edding.tech/en/blog/high-quality-permanent-coding-ensuring-traceability-for-the-spirits-industry. Any data already collected by downstream companies for these purposes could be leveraged for preliminary risk screening and to prioritize any potential supply chain areas that might benefit from heightened due diligence.

• The U.S. Department of State has cited risks of forced labor and deceptive recruitment practices for seasonal workers in large grape vineyards, such as those found in France.²2022 Trafficking in Persons Report. U.S. Department of State, Office to Monitor and Combat Trafficking in Persons. 2022, https://www.state.gov/reports/2022-trafficking-in-persons-report/. 
• The U.S. Department of Labor has identified child labor in alcoholic beverage production in Cambodia.³U.S. Department of Labor, Bureau of International Affairs. List of Goods Produced by Child Labor or Forced Labor. 2022, https://www.dol.gov/sites/dolgov/files/ILAB/child_labor_reports/tda2021/2022-TVPRA-List-of-Goods-v3.pdf. 
• Labor risk, largely among migrant worker populations, has been noted in grape production in top wine-producing countries including France, Argentina, Chile, Italy, the United States, Spain, and South Africa.⁴2022 Trafficking in Persons Report. U.S. Department of State, Office to Monitor and Combat Trafficking in Persons. 2022, https://www.state.gov/reports/2022-trafficking-in-persons-report; 2020 Department of Labor List of Goods Produced by Forced or Child Labor. Department of Labor, Sept. 2020, https://www.dol.gov/sites/dolgov/files/ILAB/child_labor_reports/tda2019/2020_TVPRA_List_Online_Final.pdf; Donaldson, Maggy. “Advocates say EU loophole leaves Latin American workers in legal limbo.” Aljazeera America. 2015. http://america.aljazeera.com/articles/2015/8/2/latin-american-migrant-workers-in-spain.html; Stock, Steven and Paredes, David. “Child Labor: Young Hands Picking Our Food.” NBC Bay Area. 2012. https://www.nbcbayarea.com/investigations/series/children-in-the-field/Children-in-the-Field-Picking-Our-Food-164796976.html; Human Rights Watch. Fields of Peril. 2011. https://www.hrw.org/report/2010/05/05/fields-peril/child-labor-us-agriculture Research in South Africa and Europe has identified female workers in wine supply chains who receive lower wages and are more likely to be engaged in insecure employment.⁵Greenberg, S. 2013. “A gendered analysis of wine export value chains from South Africa to Sweden,” Agricultural Economics Research, Policy and Practice in Southern Africa, 52(3): 34-62. https://www.tandfonline.com/doi/abs/10.1080/03031853.2013.821747.  

• The production of alcohol involves numerous processes of transformation as inputs go through fermentation, mixing, and malting processes to become alcoholic beverages.⁶”The Beer Supply Chain in 2022 and Beyond.” Unleashed, 12 Jan. 2021, www.unleashedsoftware.com/blog/the-beer-supply-chain-in-2021-and-beyond.  Several of the upstream raw materials used as ingredients in alcoholic beverages are grown in complex supply chains with many small producers, co-mingling, and overall high levels of opacity.
• Small, independent craft breweries are a growing market and are often labor-intensive.⁷Goodfellow, Christopher. “The British Craft Beer Breweries Taking Over the World.” The Guardian, 21 Oct. 2014, www.theguardian.com/small-business-network/2014/oct/21/british-craft-beer-breweries-export/.   Some large producers have invested in vertical integration to control their sourced inputs––from hop farms to malt mills⁸Doering, Christopher. “Farm to Pint: How Anheuser-Busch Cultivates Its Ingredients Amid a Changing Climate and Customer.” FoodDive, 20 Feb. 2020, www.fooddive.com/news/farm-to-pint-how-anheuser-busch-cultivates-its-ingredients-amid-a-changing/570993/––and make investments for sustainable production and supply chain traceability.⁹”The Beer Supply Chain in 2022 and Beyond.” Unleashed,  12 Jan. 2021, www.unleashedsoftware.com/blog/the-beer-supply-chain-in-2021-and-beyond. 
• There have been numerous supply chain disruptions since the COVID-19 pandemic, including transhipping delays, limited storage, and constrained glass bottle acquisition. These challenges have led some actors to re-organize their suppliers and their supply chains.¹⁰Kaplan, Andrew. “How Wine and Spirits Companies Are Navigating the Supply Chain Chaos.” SevenFiftyDaily, 2 May 2022, daily.sevenfifty.com/how-wine-and-spirits-companies-are-navigating-the-supply-chain-chaos/

• Raw material inputs pose the highest labor risk for alcoholic beverages. Sugarcane, used for some spirits, like rum or vodka, has been noted as a high-risk good for migrant labor, child labor, and forced labor.¹¹How Food and Beverage Companies Tackle Forced Labor Risks in Sugarcane Supply Chains. Know The Chain, Aug. 2017, knowthechain.org/wp-content/uploads/KTC-SugarcaneReport-Final_August-2017.pdf.  Grapes for wine, usually cultivated in medium or large vineyards, often utilize recruited migrant labor, which may pose a risk of trafficking and forced labor.¹²Cole, Katherine. “How Labor Challenges Affected the 2019 Grape Harvest.” SevenFiftyDaily, 9 Nov. 2019, daily.sevenfifty.com/how-labor-challenges-affected-the-2019-grape-harvest/. 
• In addition to risk in agricultural inputs, such as sugarcane¹³How Food and Beverage Companies Tackle Forced Labor Risks in Sugarcane Supply Chains. Know The Chain, Aug. 2017, knowthechain.org/wp-content/uploads/KTC-SugarcaneReport-Final_August-2017.pdf.   and grapes,¹⁴Cole, Katherine. ”How Labor Challenges Affected the 2019 Grape Harvest.” SevenFiftyDaily, 9 Nov. 2019, daily.sevenfifty.com/how-labor-challenges-affected-the-2019-grape-harvest/.  as well as in alcoholic beverage brewing, fermenting, and mixing in some contexts, there are also risks in downstream nodes. These risks can occur during the production of glass¹⁵ List of Goods Produced by Child or Forced Labor. Bureau of International Labor Affairs, 23 June 2021, www.dol.gov/agencies/ilab/reports/child-labor/list-of-goods?tid=All&field_exp_good_target_id=5800&field_exp_exploitation_type_target_id_1=All&items_per_page=10   for bottling and waste-picking for materials to utilize in recycled bottling/packaging.¹⁶ Companies Called to Support Waste Pickers, a Global Essential Workforce at Risk. Verite, 2020, verite.org/covid-19-and-recycling-sector.   

Different alcoholic beverages are produced with different agricultural commodities––wine with grapes, beer with hops and barley, and spirits with corn, wheat, rye, or rice. In general, alcohol producers procure the inputs for their beverages. Producers perform a variety of processes such as fermenting, mashing, mixing, lautering, hopping, ageing, and distilling, amongst others. Once the appropriate beverage has been produced, it is canned, bottled, or otherwise packaged. Alcoholic beverages are then sold directly to retailers or to wholesalers, who sell the products to retailers.¹⁷Distillation process, Spirits Europe, spirits.eu/a-spirit-of-tradition/distillation-process#:~:text=All%20spirits%20go%20through%20at,alcohol%20is%20separated%20and%20removed; Beer 101: The Fundamental Steps of Brewing, The Beer Connoisseur, beerconnoisseur.com/articles/beer-101-fundamental-steps-brewing; Anderson, C.J., Zarra, Y. & Kirby, J. “The Manufacturing Process.” Wine Commodity Chain Project, 2015, u.osu.edu/commoditychainwine/the-manufacturing-process.

• 1
  Beverage Industry, Laetus, https://www.laetus.com/en/industries/beverages. High quality, permanent coding: ensuring traceability for the spirits industry, edding, https://edding.tech/en/blog/high-quality-permanent-coding-ensuring-traceability-for-the-spirits-industry.
• 2
  2022 Trafficking in Persons Report. U.S. Department of State, Office to Monitor and Combat Trafficking in Persons. 2022, https://www.state.gov/reports/2022-trafficking-in-persons-report/. 
• 3
  U.S. Department of Labor, Bureau of International Affairs. List of Goods Produced by Child Labor or Forced Labor. 2022, https://www.dol.gov/sites/dolgov/files/ILAB/child_labor_reports/tda2021/2022-TVPRA-List-of-Goods-v3.pdf. 
• 4
  2022 Trafficking in Persons Report. U.S. Department of State, Office to Monitor and Combat Trafficking in Persons. 2022, https://www.state.gov/reports/2022-trafficking-in-persons-report; 2020 Department of Labor List of Goods Produced by Forced or Child Labor. Department of Labor, Sept. 2020, https://www.dol.gov/sites/dolgov/files/ILAB/child_labor_reports/tda2019/2020_TVPRA_List_Online_Final.pdf; Donaldson, Maggy. “Advocates say EU loophole leaves Latin American workers in legal limbo.” Aljazeera America. 2015. http://america.aljazeera.com/articles/2015/8/2/latin-american-migrant-workers-in-spain.html; Stock, Steven and Paredes, David. “Child Labor: Young Hands Picking Our Food.” NBC Bay Area. 2012. https://www.nbcbayarea.com/investigations/series/children-in-the-field/Children-in-the-Field-Picking-Our-Food-164796976.html; Human Rights Watch. Fields of Peril. 2011. https://www.hrw.org/report/2010/05/05/fields-peril/child-labor-us-agriculture
• 5
  Greenberg, S. 2013. “A gendered analysis of wine export value chains from South Africa to Sweden,” Agricultural Economics Research, Policy and Practice in Southern Africa, 52(3): 34-62. https://www.tandfonline.com/doi/abs/10.1080/03031853.2013.821747.  
• 6
  ”The Beer Supply Chain in 2022 and Beyond.” Unleashed, 12 Jan. 2021, www.unleashedsoftware.com/blog/the-beer-supply-chain-in-2021-and-beyond. 
• 7
  Goodfellow, Christopher. “The British Craft Beer Breweries Taking Over the World.” The Guardian, 21 Oct. 2014, www.theguardian.com/small-business-network/2014/oct/21/british-craft-beer-breweries-export/.  
• 8
  Doering, Christopher. “Farm to Pint: How Anheuser-Busch Cultivates Its Ingredients Amid a Changing Climate and Customer.” FoodDive, 20 Feb. 2020, www.fooddive.com/news/farm-to-pint-how-anheuser-busch-cultivates-its-ingredients-amid-a-changing/570993/
• 9
  ”The Beer Supply Chain in 2022 and Beyond.” Unleashed,  12 Jan. 2021, www.unleashedsoftware.com/blog/the-beer-supply-chain-in-2021-and-beyond. 
• 10
  Kaplan, Andrew. “How Wine and Spirits Companies Are Navigating the Supply Chain Chaos.” SevenFiftyDaily, 2 May 2022, daily.sevenfifty.com/how-wine-and-spirits-companies-are-navigating-the-supply-chain-chaos/
• 11
  How Food and Beverage Companies Tackle Forced Labor Risks in Sugarcane Supply Chains. Know The Chain, Aug. 2017, knowthechain.org/wp-content/uploads/KTC-SugarcaneReport-Final_August-2017.pdf. 
• 12
  Cole, Katherine. “How Labor Challenges Affected the 2019 Grape Harvest.” SevenFiftyDaily, 9 Nov. 2019, daily.sevenfifty.com/how-labor-challenges-affected-the-2019-grape-harvest/. 
• 13
  How Food and Beverage Companies Tackle Forced Labor Risks in Sugarcane Supply Chains. Know The Chain, Aug. 2017, knowthechain.org/wp-content/uploads/KTC-SugarcaneReport-Final_August-2017.pdf.  
• 14
  Cole, Katherine. ”How Labor Challenges Affected the 2019 Grape Harvest.” SevenFiftyDaily, 9 Nov. 2019, daily.sevenfifty.com/how-labor-challenges-affected-the-2019-grape-harvest/. 
• 15
   List of Goods Produced by Child or Forced Labor. Bureau of International Labor Affairs, 23 June 2021, www.dol.gov/agencies/ilab/reports/child-labor/list-of-goods?tid=All&field_exp_good_target_id=5800&field_exp_exploitation_type_target_id_1=All&items_per_page=10  
• 16
   Companies Called to Support Waste Pickers, a Global Essential Workforce at Risk. Verite, 2020, verite.org/covid-19-and-recycling-sector.   
• 17
  Distillation process, Spirits Europe, spirits.eu/a-spirit-of-tradition/distillation-process#:~:text=All%20spirits%20go%20through%20at,alcohol%20is%20separated%20and%20removed; Beer 101: The Fundamental Steps of Brewing, The Beer Connoisseur, beerconnoisseur.com/articles/beer-101-fundamental-steps-brewing; Anderson, C.J., Zarra, Y. & Kirby, J. “The Manufacturing Process.” Wine Commodity Chain Project, 2015, u.osu.edu/commoditychainwine/the-manufacturing-process.
• 18
  List of exporters for the selected product in 2021. Product: 22 Beverages, spirits and vinegar. www.trademap.org/Country_SelProduct.aspx?nvpm=1%7c%7c%7c%7c%7c22%7c%7c%7c2%7c1%7c1%7c2%7c1%7c1%7c2%7c1%7c1%7c1.