Tobacco industry outraged as illicit cigarettes flood SA market

British America Tobacco South Africa (Batsa) said that an Ipsos study conducted in March showed that 74% of retail outlets in Gauteng, the Western Cape and the Free State were now openly selling illegal cigarettes.

FILE: Police confiscate illicit cigarettes valued at R122,000 destined for the black market. Image: SAPS

CAPE TOWN - There's outrage in the South African tobacco industry as illicit cigarettes are flooding the market.

British America Tobacco South Africa (Batsa) said that an Ipsos study conducted in March showed that 74% of retail outlets in Gauteng, the Western Cape and the Free State were now openly selling illegal cigarettes.

The sector believed that an 8% hike in tobacco taxes appeared to have triggered an all-out price war in key provinces.

Batsa said that the March Ipsos survey showed that over 7% more retailers had been selling illegal cigarettes compared to February.

The cigarette manufacturer claimed that brands owned by the Zimbabwean Gold Leaf Tobacco Corporation and manufacturers associated to Fita were competing in the illegal market.

Batsa's Johnny Moloto said that these cigarettes were retailing for as little as R6 for a pack of 20.

"All tobacco companies should be complying with Sars tobacco production counter rules. Immediate introduction of a minimum retail sales price of R28 for a packet of 20 cigarettes. The government should finally rectify the WHO illicit trade protocol."

The Tobacco Transformation Alliance's Zachariah Motsumi shared the sentiment.

"We have seen these brands and your RG also, it's being sold below the minimum collectable tax. This is not benefiting the industry, it is also not benefiting the country."

He added that traders were building on criminal networks set up when a cigarette sales ban was in place last year.

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