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'More international syndicates targeting SA to satisfy booming cigarette demand'

30 June 2020 12:47 PM
Tags:
Crime
Johan van Loggerenberg
Cigarette smuggling
illicit trade
cigarette ban
ban on cigarette sales
tobacco traders
criminal syndicates

Profits generated by illicit cigarette traders in South Africa have reached unprecedented levels and transnational groups want a slice of the pie.

Former SARS group executive Johann van Loggerenberg says South Africa is now the target of transnational criminal syndicates eager to cash in on the booming illegal cigarette trade.

Van Loggerenberg, the author of Tobacco Wars, believes criminal syndicates have made well over R3 billion a month since the start of lockdown.

The tax consultant says South Africa's illicit cigarette market is seeing new entrants from regions such as France, China, and Central Africa.

He says syndicates are taking advantage of the rising demand and the country's poor policing of the cigarette ban.

RELATED: We're already R54 billion down on tax collection since lockdown - SARS boss

According to Van Loggerenberg, most of the illicit cigarettes circulating in South Africa are from outside of the border.

These include less familiar brands from new territories as well as established cigarette brands smuggled into SA from neighboring countries in Southern Africa.

My biggest concern is the influx of transnational organised crime syndicates that see South Africa - with its 7.5 million-odd adult smokers as a sitting duck... They are beginning to symbiotically co-exist with some of the older syndicates and gangs in the country.

Johann van Loggerenberg, Tax consultant

Permission was given for local manufacturers to reopen and manufacture for export only. In other words, they are manufacturing cigarettes but these are all, in theory, destined to leave the country.

Johann van Loggerenberg, Tax consultant

When you look at what's available currently in lockdown - and I've been studying this almost since day one - you find a blend of every single possible brand, whether its a multinational or local manufacturer brand.

Johann van Loggerenberg, Tax consultant

It just depends on the geolocation. In certain areas, some brands are more concentrated than others but you can buy any possible brand that you can imagine somewhere in South Africa - at three to five times the normal price.

Johann van Loggerenberg, Tax consultant

Lockdown came fast and the ban on the trade of cigarettes came as equally fast, but that did not - in the beginning of the lockdown period - eradicate stock that was situated in the value chain.

Johann van Loggerenberg, Tax consultant

Listen to the discussion on Afternoon Drive with John Maytham:


30 June 2020 12:47 PM
Tags:
Crime
Johan van Loggerenberg
Cigarette smuggling
illicit trade
cigarette ban
ban on cigarette sales
tobacco traders
criminal syndicates

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