Illicit cigarettes now make up more than 50% of SA market

Illicit cigarettes make up more than half of South Africa’s tobacco market.

That is according to a University of Cape Town (UCT) study looking into the state of the tobacco trade.

The research paper has revealed that the illegal market poses a serious threat to public health and State tax revenue.

UCT’s research unit on the economics of excisable products found nearly 60% of cigarettes sold in 2021 were likely untaxed and illegal.

The study showed that the illicit trade has doubled since before the COVID-19 cigarette sales ban, with little sign of recovery in the legal market.

A professor at the school of economics at UCT, Corné van Walbeek, said the industry has undergone a major shift.

"Our guestimate is that it is in the order of about 60% of the market, and that is very concerning. Many people think that the sales ban of 2020 was the point where illicit sales became a problem, but that's actually not true."

Researchers have appealed to the government to secure the country's tobacco supply chain urgently.

Van Walbeek said illicit cigarettes have been sold through informal outlets like spaza shops since 2010.

"Also, especially during the State capture years and all the problems with the South African Revenue Service. It was about 30% of the market by 2018, but the sales ban of 2020 really accelerated the illicit market."