Illegal cigarettes are 'more profitable than heroin'. Here’s how they’re getting into SA.
- Illegal cigarettes have a higher profit margin than heroin, say experts, because they're so cheap to manufacture.
- That's why smugglers are so keen on getting their products into South Africa under lockdown.
- Smugglers use a range of techniques, from "ant smugglers" running across dry river bends, to shipping containers with false bottoms.
- For more stories go to www.BusinessInsider.co.za.
Smugglers have an extensive network already set up for moving illicit tobacco products around the country, experts say, and that is how illegal cigarettes are still appearing in spaza shops and corner cafes, even after more than 80 days of sales being banned.
Illegal cigarettes are either smuggled in from outside South Africa, or they’re secretly produced in-country, away from the gaze of the SA Revenue Service (Sars), according to experts.
And it’s a very lucrative business. The ban on smoking during South Africa's lockdown has earned criminal syndicates at least R6 billion so far, estimates Johann van Loggerenberg, author of Tobacco Wars.
A recent UCT study found that 90% of smokers have bought cigarettes during lockdown. That is despite the prices of illegal cigarettes typically being triple the price of a normal packet.
According to Van Loggerenberg, the largest volume of illegal cigarettes comes from smuggling across borders. “Some of them are coming in from neighbouring states. And some of them are coming in from further afield, such as France, China, the DRC.”
It’s much cheaper, and easier, to smuggle them in from neighbouring states, former Sars lawyer Telita Snyckers, and author of Dirty Tobacco, told Business Insider South Africa.
“Typically they don’t travel far because of the freight cost. Shipping costs are very expensive and Zimbabwe, which is a big tobacco production hub, is right next to us.”
Right now, international syndicates are very eager to smuggle to South Africa, despite the freight cost, which is why smokers are seeing stranger brands from countries such as China on offer.
“You have 7.5 million smokers in South Africa who’ve just had their supply cut off,” says Van Loggerenberg. “It’s any entrepreneur or capitalist’s dream.”
Syndicates rely on so-called “ant smugglers” who simply run across the border between South Africa and neighbouring countries, says Snyckers. They typically have a backpack stuffed full of illegal cigarettes, and often use dry river beds at least five kilometres away from border posts. These cigarettes are then distributed in border provinces such as Limpopo.
But that’s just the start. Much larger volumes are smuggled in through containers on the backs of trucks. Often the trucks are on consignment to Zimbabwe, where they have a legitimate delivery to make. However, instead of returning empty, they’re full of cigarette cartons. Smugglers also hide cigarettes in hidden compartments and false bottoms. Illegal cigarettes are so cheap to manufacture, and so lucrative that smugglers are sometime able to bribe their way past customs officials. According to Snyckers, illegal cigarettes have a higher profit margin than heroin.
It’s not just trucks. Cigarettes are also moved by ship, says Van Loggerenberg. Either in small boats that drop packages just off the coast, or in large shipping containers where they’re declared as something else.
Another method, he says, is for smugglers to modify containers with false bottoms or false compartments so that illegal cigarettes are transported into the country alongside legitimate goods.
Once the packets are in the country, and out of the containers, they’re simply transported by bakkie and truck to towns, where they’re distributed off the back of the vehicle. A local distributor then gets the items to local shops, such as spaza shops and cafes, and then into the hands of smokers.
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