The South African illicit cigarette trade: Smoke signals for reform?

Abstract

South Africa's Illicit cigarette trade (ICT) Is not merely large and growing but outperforms the legitimate sale of tobacco products. It is operated by extensive criminal networks, 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African authorities to effectively regulate this grey market (where the legal and illegal coincide) paired with its outdated approach, is the kindling that feeds this illicit trade's flame.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 ICT 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.