When SA banned trade in cigarettes and alcohol last year in response to the Covid-19 epidemic critics warned that this would serve largely to drive these industries underground. Drawing on more than a century of experience going back to the 1919 Volsted Act, which introduced prohibition to the US, these commentators suggested the main beneficiaries would be criminal networks.

In mid-2021 it is becoming apparent that these fears were well founded. It seems the illicit trade has become more deeply entrenched and thus more difficult to root out. Illicit cigarettes are by definition not taxed and thus sell for about half the price of the legal alternative. In its 2021 results presentation retail group Spar said cigarette sales at its SA franchise outlets were down 13.1% in the six months to March 2021 compared to the same period before the ban. The loss of market share to criminal operators has robbed the grocery retailer of nearly R500m. ..

Subscribe now to unlock this article.

Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).

There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.

Cancel anytime.

Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.

Speech Bubbles

Please read our Comment Policy before commenting.