While lockdown regulations continue to bludgeon the South African economy, the illicit cigarette trade is thriving in Brooklyn.
On Friday July 31, Tabletalk visited five shops in the area under the guise of shopping for cigarettes.
The sale of cigarettes, e-cigarettes and related tobacco products has been prohibited since the start of the national lockdown at the end of March. The ban was strongly driven by Minister of Co-operative Governance and Traditional Affairs Dr Nkosazana Dlamini Zuma whose “When people zol” speech was turned into a remix catchier than Covid-19 itself.
All the shops were in the Koeberg Road corridor and all had packets and loose cigarettes for sale. People were also smoking in the street.
While none of the popular brands such as Camel, Marlboro or Peter Stuyvesant were available, cheaper, unknown brands were easy to come by.
The going rate for packets ranged from R40 to R60 while loose cigarettes sold for between R3 to R4.
At the first shop we visited, the cheapest loose cigarettes were VIPs, which sold for R3 while a pack would set you back R45. Chicagos were the priciest cigarettes available at R60 a pack.
At another shop, a cashier rang up a plastic bag filled with cigarettes for a customer. There were 19 packets in total – a mix of JFK, VIP and Liberty. He spent R1900 on his purchase.
The cigarettes were for his colleagues, and he bought from the Brooklyn shop because he got a special price, he said.
“These are usually between R20 to R25, now they double the price. We are spending so much more on cigarettes now,” the man said.
At another shop, the cashier said it wasn’t worth it to buy popular brands because the cartons were too costly.
“It will cost me about R1 500 for a carton, and I will have to sell it for more than a R100. People won’t buy it.” He said brands had popped up during lockdown that he had never seen before such as Wish and Supermatch.
While talking to the cashier, Tabletalk was approached by a woman who said she knew where to get a larger variety of brands. She walked to a motor-spares garage just off Koeberg Road where people were queuing to buy cigarettes. On the counter, nearly 30 different cigarette brands were displayed with a sign: “My lockdown collection”. A woman said she had been smoking JKF for years and used to pay R130 a carton. She now forks out R500 for the same carton.
Another woman said she had smoked Camel Double at R38 a pack before lockdown, now she pays R60 for a cheap-quality brand called Caesar.
According to British American Tobacco South Africa (BATSA), a new independent study by the Research Unit on the Economics of Excisable Products (REEP) shows 93% of South Africa’s approximately 11 million smokers are still able to buy cigarettes.
“The market has been completely taken over by illicit cigarette suppliers at the expense of law-abiding and tax compliant manufacturers, like BATSA, and the fiscus continues to lose R35 million every single day in taxes,” said BATSA.
The research, according to BATSA, points to a 430% increase in the number of people sharing cigarettes, and “potentially exposing themselves to Covid-19”, as a result of the four-month ban on the legal sale of tobacco and vaping products.
This is largely due to the high price of the illicit products, which on average are 250% higher than the pre-lockdown price, according to BATSA. The company also warned that replacing the prohibition with excise increases “would compound the devastating damage of the last four months”.
BATSA said a post-ban hike in excise tax would “permanently” hand the majority of the cigarette market to criminals who do not contribute to the country’s fiscus.
BATSA is calling for extra resources to be allocated to the South African Revenue Service (SARS) to ensure the tobacco market can be taken back from criminals in the aftermath of the ban.