September 12, 2024

Tobacco Companies to Challenge Lockdown Regulations as Illicit Cigarette Market Surges

In the coming weeks, tobacco companies will argue in court for the right to sell their products under lockdown regulations. The government has opposed this, citing studies that suggest smoking heightens the risks associated with contracting Covid-19. Officials argue that a ban is necessary to reduce hospital admissions.

Co-operative Governance and Traditional Affairs Minister Nkosazana Dlamini-Zuma explained in April that smoking spreads saliva through shared cigarettes, contributing to the virus's transmission. Her comments have since inspired popular remixed songs on social media.

Meanwhile, attention is increasingly focused on the booming illicit cigarette market, which has flourished due to the legal sales ban.

Samantha Filby, co-author of the report “Lighting Up The Illicit Market: Smoker’s Responses to the Cigarette Sales Ban in South Africa,” warned that the ban is fueling a thriving illegal market that will be difficult to dismantle.

The research indicates that 16% of smokers quit during the lockdown, while 90% of those who continued smoking are now buying cigarettes illegally, highlighting the scale of the black market.

Filby noted that multinational tobacco companies likely experienced financial losses, while local producers may have profited from increased market share and price hikes. Additionally, the government may have lost around R1.1 billion in monthly revenue.