South Africa
It's lighters up as cigarette black market thrives under lockdown─── 13:44 Fri, 15 May 2020
The debate about the decision to continue the ban on cigarettes sales continues, and while government sticks to its decision, it looks like the black market is thriving.
The ban on cigarette buying was implemented at the start of the coronavirus lockdown almost seven weeks ago.
Tobacco companies have been battling with government to allow the sale of cigarettes, and smokers are now purchasing cigarettes illegally.
Walk through the streets of Cape Town, and you'll see people standing outside buildings or sitting alone on benches smoking a cigarette.
These are the lucky nicotine addicts who've somehow managed to get their hands on their fix. Even those with some cigarettes left are grumpy about the continued ban on the sale of tobacco products, saying it feels like a sanction.
“Why are we the only country that’s being punished?” one resident asked.
A few metres away, there's a shop that's been selling cigarettes on the sly for weeks now.
The cost to smokers who just can't face quitting is high, but the cost of the ban on tobacco sales to the fiscus is much higher.
The nation is losing R35 million just from the duties on cigarettes, and even the commissioner of the South African Revenue Service has expressed concerns that the trade in illicit cigarettes will flourish as a result of the ban.
Two months ago, a packet of Marlboro cigarettes would have set a smoker back around R40. But for those willing to skirt the law and buy from illegal vendors under lockdown, they'll have to pay R220 for a pack of 20.
Economists said the massive price hikes were all about supply, demand, and the risk involved in the illicit trading.
The demand remains constant as smokers are willing to pay a premium to get their nicotine release. The supply is less reliable once shops run out of their current stock and can’t replenish them.
“The shops know that the people are desperate for cigarettes, and so they increased the prices of the last few packets that they have,” economist Mike Schussler said.
He added that in a situation like this, vendors who were willing to sell illegally would make some money, but there weren't really any winners.
“The one lot is taking a lot of risks, the other lot is going to have very high prices.”
And as criminologist John Cartwright points out, there's an unintended social consequence too.
“That’s an encouragement of criminality and that’s not acceptable.”
When the president addressed the nation earlier this week, he promised some relaxations to the level four regulations, but avoided saying what exactly those would be, perhaps opting not to raise the hopes of roughly 11 million smokers, only to dash them once more.
