Tobacco Association blames weak borders as illicit trade soars to 75% of total market

South Africa’s illicit tobacco trade has exploded, now accounting for an estimated 75% of the national market, according to independent research shared with Parliament by SARS Commissioner Edward Kieswetter.

Just a year ago, illegal cigarettes made up 19% of sales.

According to Kieswetter, the increase has cost the country R84 billion in lost excise tax revenue between 2020 and 2022.

Fair Trade Independent Tobacco Association (Fita) chairperson Sinenhlanhla Mnguni says the figures do not come as a surprise, blaming cross-border smuggling and weak border control for the crisis.

"The problems are that borders are wide, under-resourced and easily exploited by syndicates that operate with sophistication and impunity. We've always urged the government to treat border security as a national and economic security priority.

"If you go back to 2020, and you look at the lockdown period, where cigarettes were not meant to be sold in South Africa, we still found several brands, which were manufactured outside this country, making their way into South Africa.

Those syndicates which are responsible for that have now strengthened because they've obviously found a new market in South Africa. This has led to a growing increase in the size and magnitude of the illicit trade.

"I think it goes further than just health, but also educating the general population about the impact of smoking illicit cigarettes insofar as the detrimental effect it has on the economy, the creation of jobs, and of course, the ability of government to provide for the citizens of this country with healthcare, education, and things of that nature."

Mnguni also warned that corruption and poor enforcement continue to fuel the trade, while higher excise taxes and the lack of engagement with the tobacco industry since 2020 have only made matters worse.

To listen to Mnguni in conversation with 702 and CapeTalk's Africa Melane, use the audio player below: