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'It's a Wild West situation' - most smokers able to access ciggies, at a price

16 May 2020 10:43 AM
Tags:
UCT
SARS
British American Tobacco BAT
Philip Morris International
illicit cigarettes
illicit cigarette trade
COVID-19
SA lockdown
cigarette sale ban
Tobacco Ban
Reep

A UCT study shows that around 90% of SA's nicotine addicts have been able to buy cigarettes during the lockdown ban on sales.

The overwhelming majority of South Africa's estimated 11-million smokers have been able to access illicit cigarettes during the national lockdown, according to a study by the University of Cape Town's (UCT's) Research Unit on the Economics of Excisable Products (Reep).

Africa Melane gets more detail on the findings from Reep director, Professor Corné van Walbeek.

RELATED: [PICS] More suspected smugglers bust with illicit cigarettes across Western Cape

The prof says what had been a formal system that could be controlled, has now become an informal system.

It's now become a bit of a Wild West situation where people are getting cigarettes from pretty much anywhere... and they are desperate.

Prof. Corné van Walbeek, Director - Reep at UCT

People are getting them from a variety of sources - from spaza shops, from whatsapp groups, even from illicit drug traders, from street vendors...

Prof. Corné van Walbeek, Director - Reep at UCT

Through using three different platforms for the online survey he says, the researchers eventually got a relatively representative sample of South Africans.

"The survey was filled out by more than 16 000 respondents. From these responses, 12 204 analysable observations were derived."

What we then do, as one should do, is that we weight the data such that those groups that are relatively under-represented in the sample get more weight and those people that are over-represented in the sample get less weight so that we can actually make some comments about the country as a whole from a representation point of view.

Prof. Corné van Walbeek, Director - Reep at UCT

Our results indicate that approximately 91% of males and 88% of females were able to access cigarettes, so it's approximately an average of 90%.

Prof. Corné van Walbeek, Director - Reep at UCT

This is pretty consistent across all race groups, across all income groups. It's pretty representative of the country.

Prof. Corné van Walbeek, Director - Reep at UCT

While the majority of smokers have been able to get hold of their tobacco fix, they are complaining about the price and the quality he says.

The study shows there's been a huge shift in the market structure from multinational corporations (British American Tobacco, Philip Morris etc.) towards local producers.

Before the lockdown approximately 80% of cigarettes were smoked by people who smoked British American Tobacco-type brands. After the lockdown we see that the share of the multinational corporations has shrunk to about a third.

Prof. Corné van Walbeek, Director - Reep at UCT

Some of them [local producers] have been accused that they've been involved with dodgy tax payments etcetera in the past (not that all companies are clean)... so people are complaining bitterly about the prices, they're complaining about getting access, they're complaining about being criminalised.

Prof. Corné van Walbeek, Director - Reep at UCT

The study shows that over a 13-day period (29 April - 11 May) the price of cigarettes increased on a daily basis by an average of 4.4% - that equates to an approximate 50% increase from Day 1 to Day 13.

Clearly there's a desperation in the market that we were fortunate enough in our survey to pick up that is causing the prices to increase at a completely exponential rate, something that we have never seen in this country before.

Prof. Corné van Walbeek, Director - Reep at UCT

I think the cigarette market after the lockdown is going to be quite different and it's going to be very difficult for the South African Revenue Service (Sars) to put the genie back into the bottle because it's been let out now.

Prof. Corné van Walbeek, Director - Reep at UCT

Listen to the enlightening conversation below:




16 May 2020 10:43 AM
Tags:
UCT
SARS
British American Tobacco BAT
Philip Morris International
illicit cigarettes
illicit cigarette trade
COVID-19
SA lockdown
cigarette sale ban
Tobacco Ban
Reep

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