Illegal Cigarette Trade Hits Record Highs

    Photo: Tobacco Reporter archive

    South Africa’s illegal trade in cigarettes has hit record highs, a new IPSOS report shows.

    At least two-thirds of stores in four hotspot provinces are selling cigarettes below the minimum collectible tax (MCT) of ZAR21.60 ($1.40). In Free State and Western Cape, the numbers rise to three in four stores.

    “South Africa’s illicit cigarette trade—the biggest black market for cigarettes in the world—is now officially out of control,” said British American Tobacco South Africa (BATSA) General Manager Johnny Moloto in a statement.

    “Over a year since the disastrous lockdown sales ban, the illegal networks it enabled and enriched continue to dominate the retail sector. They are destroying legal jobs and livelihoods and depriving the treasury of ZAR19 billion in cigarette excise for 2021 alone.

    “Much-publicized efforts by SARS, SAPS and SANDF to disrupt these cartels have merely scratched the surface. Government has a duty to make this menace a national priority, enforce the law without fear or favor and rid our country of this revenue-sapping scourge once and for all.”

    Following its fourth investigation of the year into the tobacco trade, IPSOS’ new report reveals: illegal cigarettes are available in almost half of stores (43 percent) nationwide; cigarettes are selling for the equivalent of ZAR8 per pack, almost less than one-third of the MCT; the number of forecourts selling illegal cigarettes has almost tripled in the past four months; and the number of stores in Northern Cape selling illegal cigarettes (63 percent) has quadrupled in the past four months.

    The latest IPSOS fieldwork was carried out from Oct. 8–15, 2021, and follows similar studies in March, February and June of this year. Using the mystery shopper model, the researchers bought the cheapest cigarettes in 4,486 stores nationwide.