Cheap smokes push legit brands out of township shops

Only one out of four tuckshops surveyed in two townships around Rustenburg sells reputable cigarette brands.

An Ethiopian man who runs a tuckshop in Ikageng outside Rustenburg said reputable cigarette brands were not selling as fast as illicit cigarettes.

“These ones are not selling,” he said, holding a box of a reputable cigarette brand.

“A box of 20 goes for R65.00, and one (loose) draw is R3.50,” said the Ethiopian man who preferred to use his South African given name of Jakaranda.

According to him, smokers preferred to buy cheap illicit cigarettes.

In Lethabong, a foreign national who declined to be identified said there was a supplier of illicit cigarettes.

“I do not know how he got these cigarettes. I know the cigarettes are from Zimbabwe and Mozambique. I sell them because customers tell me they want them. I have to give them what they want.”

A smoker, Petrus Martins said he smokes illicit cigarettes because that is all he can afford.

“I cannot afford an R3.50 loose draw; that is why I smoke these fake ones. They are cheap and sell for R1 each,” he said.

Titus Mfeko said illicit trade was not only in the cigarette market but also in alcohol.

Both men were aware that illicit trade destroys jobs and poses health risks.

British American Tobacco South Africa (BAT) SA announced last week that it would close its sole cigarette factory in South Africa at the end of the year.

The company cited the illicit cigarette trade flooding the market as one of the reasons it was shutting down its factory in Heidelberg in the Gauteng province.

“With approximately 75 per cent of the South African cigarette market now estimated to be illicit, continued 

Local manufacturing has become unviable,” said Johnny Moloto, Head of Corporate and Regulatory Affairs at BAT Sub-Saharan Africa.

According to the Consumer Goods Council of South Africa, accurate statistics of illicit trade were not available due to the unique modus operandi of those who trade in counterfeit goods. 

Estimates show that illicit and counterfeit trade was costing South Africa as much as R100 billion annually.

The council said South Africa now has one of the highest illicit cigarette trade levels in the world, at up to 74.5 per cent of the total cigarette market in South Africa in 2024.

The CEO of the Consumer Goods Council of South Africa, Zinhle Tyikwe, said illicit trade and the counterfeiting of goods was a mounting crisis in South Africa, costing the national fiscus billions in lost tax revenue, undermining the viability of legitimate businesses, and posing a growing threat to national security. 

“There is no doubt that illicit trade is one of the most significant threats facing South Africa and is also a threat to economic stability, investment, job creation and governance. This challenge now requires decisive, collective, and multi-faceted action to restore integrity to the fast-moving consumer Goods (FMCG) sector and safeguard South Africa’s economic future,” she said.

According to the federation, 67 per cent of those who buy illicit products want lower prices regardless of origin.