The biggest selling cigarette in South Africa is now an illegal, tax dodging brand, according to research commissioned by the Tobacco Institute of Southern Africa (Tisa).
Conducted by Ipsos and launched on Tuesday in Rosebank, the research has found that RG has overtaken Peter Stuyvesant as the biggest selling brand in the market.
Peter Stuyvesant now trailed RG in second position, according to the research produced as part of a fightback strategy against illicit cigarettes.
Two illegal brands known as Savannah and Caeser were also gaining traction in the market.
These illegal cigarettes are largely sold in over 100 000 informal businesses across the country. They went for as low as R10 per pack, prices that do not include taxes.
The informal market now sold 58% legal cigarettes, and 42% illicit cigarettes. The Ipsos research said the illegal producers grew their market share from 33% in just three months.
Francois van der Merwe, Tisa’s chairperson, called on the South African Revenue Service (Sars) and police to clamp down on the manufacturers of illegal cigarettes.
Van der Merwe told journalists at the launch that information they have indicates that it is a myth that most illegal cigarettes were smuggled into South Africa from neighbouring countries.
The cigarettes are manufactured in South Africa and smuggled outside, he said.
Van der Merwe said Sars already knew the local factories that produced the cigarettes.
Just last week, the Lesotho Revenue Authority confiscated 380 000 RG loose draws at the Maseru Bridge. This was a major bust in Lesotho in the last five years.
“RG is smuggled from here to Lesotho,” said Van der Merwe.
Speaking as an activist of #TakeBackTheTax, Yusuf Abramjee it was clear that the fiscus will lose more to illicit cigarette trading due to failure by the revenue collector to act.
#TakeBackTheTax claimed the country lost R7 billion to untaxed cigarette sale last year. Abramjee said the figure has grown to R8 billion and looks set to jump to R10bn.
“We call on Sars to stop playing games in this issue,” said Abramjee.@BonganiNkosi87