• June 16, 2024

Criminals Embedded in Supply Chain After Ban

 Criminals Embedded in Supply Chain After Ban
Photo: Tobacco Reporter archive

Dismantling the criminal networks that sprung up during South Africa’s ban on tobacco and alcohol sales may take years, according to Edward Kieswetter, the country’s revenue service commissioner.
The ban, aimed at managing the health impact of the Covid-19 pandemic, has allowed illegal operators to gain a foothold in the market, Kieswetter said in an online address to tax practitioners.
Having marketed themselves to previously honest smokers and drinkers during the ban, illegal and criminal operators are now embedded in the supply chain, according to Kieswetter.
Tobacco and liquor remained readily available through the black market after the ban took effect on March 27. Producers and retailers complained the restrictions have resulted in thousands of job losses and encouraged illegal trade.
National Treasury data show the government lost out on ZAR9.5 billion ($568 million) in alcohol and tobacco taxes in the first four months of the fiscal year. A 2018 report published by Tobacco Institute showed South Africa was already one of the world’s biggest markets for illicit cigarette sales at the time.
While the bans were lifted in the middle of August, shops are still only allowed to sell alcohol four days a week, and the authorities have warned they could reinstate the curbs if needed.