Smoke signals for reform? The South African illicit cigarette trade

Abstract

South Africa’s illicit cigarette trade is not merely large and growing but outperforms the legitimate sale of tobacco products. Extensive criminal networks operate it, it deprives the state of tax revenue, and although the measures are in place to curb the problem, they are proving to be unequal to the task. The inability of South African authorities to effectively regulate this grey market (where the legal and illegal coincide), paired with its outdated approach, is the kindling that feeds this illicit trade’s flame. This article describes the current scale and nature of the illicit cigarette trade and evaluates the attempts to combat it in South Africa. We conclude with recommendations on measures the state, commerce and legal authorities could take to confront the problem with a reasonable chance of success.