South African Retail Market: Over Half Retailers Suspected of Selling Illegal Tobacco Products

Market by 2FIRSTS.ai
Jul.16.2024
South African Retail Market: Over Half Retailers Suspected of Selling Illegal Tobacco Products
Over half of South African retailers are suspected of selling illegal tobacco products, says recent Ipsos study.

According to a report from South African research news on July 15, a survey conducted by Ipsos, a market research company based in Paris, France, has recently revealed a concerning trend in the retail market in South Africa: more than half of the stores are suspected of selling illegal tobacco products. The study was commissioned by British American Tobacco South Africa (Batsa) to assess the legality and compliance of the South African tobacco market.


A research team conducted a sample survey of over 4500 stores, covering the entire retail industry in South Africa. The survey results showed that new competitors have emerged in the market, selling tobacco at extremely low prices, with prices as low as 5 rand (approximately $0.27) for a pack of 20 cigarettes. This undoubtedly intensifies the fierce competition in the lower end of the market.


In retail stores, the supply of cigarettes priced below the Minimum Collectible Tax (MCT) has been fluctuating over the past few years. The latest research by Ipsos shows that the supply of cigarettes priced below 25.05 rand (about 1.38 US dollars) in wholesale and informal trade is worryingly high, at 83% and 72% respectively.


These findings suggest that punitive regulations on legal industries are meaningless, while illegal tobacco circulates widely at the lowest prices, concentrated in channels used by low-income individuals. Law enforcement agencies find it difficult to curb the constantly evolving illegal economy, resulting in the market spiraling out of control.


The head of the British American Tobacco South Africa, Johnny Moloto, expressed concern about the issue.


He pointed out that a study by Ipsos highlights the challenges faced by the new government in tackling illegal trade and cross-border illicit financial flows, with these illegal activities causing serious damage to the South African economy and tax revenue. In order to reverse this situation, authorities urgently need to prioritize tackling the illicit tobacco trade and ensure the conviction of criminal syndicate leaders. Additionally, the entry of new manufacturers has raised questions about the government's commitment to addressing illegal trade, and the government should conduct appropriate due diligence when issuing permits to avoid illicit activities within the industry.


Given the severity of the problem, it will require a collaborative effort from multiple agencies to achieve meaningful enforcement. British American Tobacco South Africa has called on the Finance Ministry to provide additional funding to the South African Revenue Service for tax investigations, and has urged the tax authority to intensify efforts to crack down on tax evaders in the illegal tobacco trade. Furthermore, one of the most effective ways to combat illegal tobacco trade is for the Finance Minister to introduce a minimum retail price, making selling tobacco below that price illegal. This would provide law enforcement agencies with a valuable tool for enforcement and prosecution, enabling them to effectively combat illegal trade. Finally, Johnny Moloto stated that British American Tobacco South Africa is calling for immediate legal audits of all tobacco factories nationwide, including their own, to ensure the industry operates legally and in compliance with regulations.


Johnny Moloto explained that the government loses approximately 24 billion rand (approximately 1.3 billion USD) in consumption tax revenue each year due to the illegal tobacco trade. The top priority for the new government is to stabilize finances, control escalating debt, and take decisive action to reverse the rapid growth of illegal tobacco trade since the ban on tobacco sales in 2020.


We welcome news tips, article submissions, interview requests, or comments on this piece.

Please contact us at info@2firsts.com, or reach out to Alan Zhao, CEO of 2Firsts, on LinkedIn


Notice

1.  This article is intended solely for professional research purposes related to industry, technology, and policy. Any references to brands or products are made purely for objective description and do not constitute any form of endorsement, recommendation, or promotion by 2Firsts.

2.  The use of nicotine-containing products — including, but not limited to, cigarettes, e-cigarettes, nicotine pouchand heated tobacco products — carries significant health risks. Users are responsible for complying with all applicable laws and regulations in their respective jurisdictions.

3.  This article is not intended to serve as the basis for any investment decisions or financial advice. 2Firsts assumes no direct or indirect liability for any inaccuracies or errors in the content.

4.  Access to this article is strictly prohibited for individuals below the legal age in their jurisdiction.

 

Copyright

 

This article is either an original work created by 2Firsts or a reproduction from third-party sources with proper attribution. All copyrights and usage rights belong to 2Firsts or the original content provider. Unauthorized reproduction, distribution, or any other form of unauthorized use by any individual or organization is strictly prohibited. Violators will be held legally accountable.

For copyright-related inquiries, please contact: info@2firsts.com

 

AI Assistance Disclaimer

 

This article may have been enhanced using AI tools to improve translation and editorial efficiency. However, due to technical limitations, inaccuracies may occur. Readers are encouraged to refer to the cited sources for the most accurate information.

We welcome any corrections or feedback. Please contact us at: info@2firsts.com

Cochrane 2026 Update Adds Nine Trials, Keeps High-Certainty Finding That Nicotine E-Cigarettes Improve Quit Rates Over NRT
Cochrane 2026 Update Adds Nine Trials, Keeps High-Certainty Finding That Nicotine E-Cigarettes Improve Quit Rates Over NRT
Cochrane’s 2026 update of its living review on electronic cigarettes for smoking cessation included 80 randomized controlled trials involving 29,861 adult smokers, with nine trials added in this update. The review retained its high-certainty conclusion that nicotine e-cigarettes increase smoking cessation rates compared with nicotine replacement therapy. In absolute terms, about 10 in 100 people using nicotine e-cigarettes may quit smoking for at least six months, compared with about 6 in 100 using NRT. The review found no clear difference in serious adverse event rates between the two groups, while longer-term safety and the relative effectiveness of newer device types remain less certain.
Sep.07
California Lawmakers Pass Disposable Nicotine Vape Ban, With Sales Prohibition Set for 2028
California Lawmakers Pass Disposable Nicotine Vape Ban, With Sales Prohibition Set for 2028
According to CBS Los Angeles on August 27, 2026, California lawmakers have passed Assembly Bill 762, which would phase out disposable, battery-embedded nicotine vapes in the state. If signed by Governor Gavin Newsom, manufacturing and importation of the covered products would be prohibited beginning January 1, 2027, followed by a sales ban on January 1, 2028. Driven primarily by concerns over electronic waste, lithium-battery fires and environmental pollution, the legislation would further shift California’s legal vape market toward rechargeable, refillable or replaceable-pod devices.
Aug.28
UK Vape Maker Riot Enters Clacton By-Election to Fight Government 'White Packaging' Proposals
UK Vape Maker Riot Enters Clacton By-Election to Fight Government 'White Packaging' Proposals
British e-liquid manufacturer Riot Labs has introduced a fictional “candidate” called Riot Man around the Clacton parliamentary by-election, seeking to mobilize consumers and retailers against parts of the UK government’s proposed restrictions on vape packaging, device appearance and retail displays. Riot Man is not listed as an official candidate.
Aug.12
Bret Koplow Takes Permanent Charge of FDA Tobacco Center After Pushing Faster PMTA Reviews, as HHS Emphasizes Innovation and Access to Lower-Risk Alternatives
Bret Koplow Takes Permanent Charge of FDA Tobacco Center After Pushing Faster PMTA Reviews, as HHS Emphasizes Innovation and Access to Lower-Risk Alternatives
The U.S. Department of Health and Human Services has named Bret Koplow permanent director of the FDA’s Center for Tobacco Products, ending his period as acting chief. Koplow has spent years working on tobacco regulation, law and policy inside the FDA and, while serving as acting director, pushed for faster PMTA reviews and nicotine pouch review pilots. HHS also said CTP will prioritize innovation and access to less harmful alternatives for adult smokers while continuing efforts to protect youth.
Sep.09
China’s Shanghai Tobacco Group Launches CNY 10.98 Million (Approximately US$1.53 Million) Procurement for Heated Tobacco Production Utility Equipment
China’s Shanghai Tobacco Group Launches CNY 10.98 Million (Approximately US$1.53 Million) Procurement for Heated Tobacco Production Utility Equipment
Shanghai Tobacco Group Co., Ltd., a tobacco manufacturing company under China National Tobacco Corporation (CNTC), has launched a public tender for heated tobacco products (HTPs) production utility equipment at its Shanghai Cigarette Factory. The project is valued at CNY 10.98 million and covers six combined air-conditioning units, electrical cabinets and control systems for production facilities. The procurement includes equipment design, supply, installation, commissioning and related training services.
Aug.07
Couche-Tard Posts Double-Digit U.S. Same-Store Growth in Other Nicotine Products, Led by Pouches
Couche-Tard Posts Double-Digit U.S. Same-Store Growth in Other Nicotine Products, Led by Pouches
Alimentation Couche-Tard said U.S. same-store sales in its “other nicotine products” category grew at a double-digit rate in the first quarter of fiscal 2027, led by nicotine pouches, while overall U.S. same-store merchandise revenues increased 1.7%. The company also said its Canadian nicotine business continued to face regulatory pressure and illicit-market headwinds. The U.S. performance coincides with Couche-Tard's participation in efforts to reopen Canadian convenience-store access to authorized nicotine pouches, though the company has not established a direct causal link between the two.
Sep.14