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SA economy losing billions due to illegal cigarettes trade

There have been allegations of licensed companies involved in manufacturing counterfeits cigarettes.

FILE: Parliamentarians questioned why this continues unabated when there are numerous agencies tasked with cracking down on the trade. Picture: sxc.hu.

CAPE TOWN - The Tobacco Institute of Southern Africa says 23 percent of the local cigarette manufacturing and distribution trade is made up of illegal products.

Officials from the institute briefed Parliament's Trade and Industry portfolio committee today on issues affecting the industry.

The institute's Francois van der Merwe told members of Parliament the country's economy has lost R22 billion to the illicit trade in cigarettes since 2010.

Van der Merwe adds there have been allegations that licensed companies are also involved in the manufacturing of counterfeit cigarettes.

On Thursday, Eyewitness News revealed former South African Revenue Service (Sars) spokesperson Adrian Lackay claims evidence has emerged that British American Tobacco (BAT), a private investigation firm, and State Security Agency officials have been involved in cigarette smuggling. BAT has denied involvement in any illegal activity.

Parliamentarians questioned why this continues unabated when there are numerous agencies tasked with cracking down on the trade.

They raised concerns the country will continue to lose money if the problem is not adequately dealt with.