Right to Reply: "Who benefits from illicit trade of cigarettes?"
On the 21 of August, the Independent Online carried an article about a BATSA campaign in which BATSA used a burning billboard to launch a campaign against illicit cigarettes. BATSA claimed that South Africa loses R6 billion in taxes because of the illicit trade in cigarettes. In sweeping statements, the company representative showed concern for this financial loss and for its impact on ordinary South Africans. This concern rings hollow when the health harm of cigarettes is considered given that 44 000 South Africans die every year from the harm caused by the use of both legal and illicit cigarettes.
In his book, ROGUE, Johan van Loggerenberg described the surveillance conducted by SARS of a major cigarette company in 2013. Although this investigation was interrupted when the tobacco industry hired its own security services to do the same monitoring, Van Loggerenberg notes that the Tactical Intervention Unit confiscated more than R300 million worth of tobacco based on information provided by the HRIUwhat is this?. This is just one example of one cigarette company being itself involved in the illicit trade of cigarettes.
BATSA controls 95% of the South African market in cigarettes so this anti-illicit trade campaign could also be viewed as a way for them to elbow other new competitors out of the market. At a TISA conference in 2014, Professor of Economics at UCT, Corne Van Walbeek’s suggested that the illicit trade in cigarettes could be a way for a new tobacco company to enter the market. Is BATSA really concerned about South Africans or are they worried about current and potential competitors who will impact on their bottom line?
We know that the tobacco industry has historically changed the illicit trade figures that they share with the public and with government. A paper by Van Walbeek and Shai (2015) show that the false figures have been used for over a decade to make claim that there has been an increase in illicit trade. If there is documented evidence of the tobacco industry lying about the size of illicit trade in South Africa in the recent past, can we really believe anything they say today?
In fact, cigarette companies could be said to have a vested interest in supporting the illicit trade as this provides a supply of cheaper cigarettes into the market, which evidence shows will attract both young and price-sensitive smokers. Young people in Africa have become an important target market for cigarette companies as a means to increase their profits long-term, as smoking is on the decrease in Europe and North America. It would therefore be in the interest of us all to find out who is actually behind the illicit trade of cigarettes in South Africa and on the continent.
To read the full IOL article, click here