31% of the 30 billion cigarettes puffed in South Africa annually are illegal. This is costing the government about R5-billion a year in lost tax revenue. The illicit trade has come under the spotlight at a conference in Cape Town this week which has been attended by authorities including the Hawks police unit, Europol and the Tobacco Institute of South Africa.
Jeannie Cameron, a Tobacco Reporter stated on the the Tobacco Institute of Southern Africa's website in August 2011, that when consumers light up smuggled or counterfeit cigarettes, keen to save money, they may be unwittingly helping to fund international organised crime and terrorists.
Redi Tlhabi on her radio show this morning, spoke to Francois van der Merwe, CEO of the Tobacco Institute of South Africa, about the illicit cigarette market. He looks at this alarming stat and explores ways to curb this trade both locally and cross-borderly. Van der Merwe states in his interview with Redi that people who buy these illegal cigarettes are defrauding the government, feeding and stimulating corruption and supporting organised crime. He also elaborates on what makes a cigarette illegal.
"A number of things... a counterfeit product is illegal. luckily we don't have a counterfeit problem.... Either it doesn't comply with government regulations; there must a health warning on the pack.... If a consumer pays less than R16.50 for a packet of cigarette there are strong indications that this is illegal..."— Francois Van Der Merwe, CEO of TISA
Dr Yussuf Saloojee from the National Council Against Smoking also called in to raise very pertinent points. Apparently there have been allegations of legitimate industry members aiding this illicit trade.
"World Governments around the world need to cooperate to identify smuggling rings..."— Dr Yussuf Saloojee, the National Council Against Smoking
Many callers to the Redi Thlabi show raised various points that the price of cigarettes is to high and that Government should lower taxes on cigarettes. One specific person asked whether the solution would be to dissolve the entire Tobacco industry completely. Van Der Merwe answered that by saying that if we did ban the entire industry, then it will just go underground.
So the question still remains, How do we stub out the Illicit Cigarette Industry?