BACKGROUND: South Africa faces one of the highest levels of illicit cigarette trade among low-and middle-income countries. The cigarette sales ban during the COVID-19 pandemic in 2020/21 further fueled the increase of illicit cigarettes, as legal sales were prohibited. This unregulated trade undermines public health initiatives and erodes government revenue. This study investigates the change in the illicit cigarette market in South Africa between 2018 and 2021, shedding light on the impact of these dynamics on both policy and public health outcomes.
METHODS: This study utilized data from two nationally representative surveys: the 2021 Global Adult Tobacco Survey South Africa (GATS SA) and the 2018 National Income Dynamics Study (NIDS). GATS SA data collection was conducted between May and August 2021, after the sales ban. Cigarette prices were standardized to per-stick equivalents and adjusted using consumption weights to account for smoking habits. Illicit trade was assessed using a price threshold approach to estimate its prevalence between 2018 and 2021. The analysis further disaggregated illicit consumption by cigarette brand, demographic characteristics, manufacturer, retailer type, and packaging type.
RESULTS: Our findings reveal that the illicit cigarette trade in South Africa grew from 30% in 2017 to 60% in 2021. Notably, 75% of cigarettes sold in informal shops (spaza shops) are illicit, highlighting the informal sector's significant role in driving illicit trade. Furthermore, over 90% of illicit cigarettes are produced by local manufacturers.
CONCLUSIONS: Our findings reveal a significant rise in the illicit cigarette trade between 2017 and 2021, highlighting the need for stronger tax administration and more effective enforcement strategies to curb illicit trade in South Africa. The surge in illicit trade has been driven largely by the increasing informalization of the market, with single-stick cigarette sales emerging as the dominant contributor to illicit purchases.