WhatsApp and e-hailing have made the sale of cigarettes dead easy. We wanted to test how easy it is to buy them under lockdown. Via a friend, we sent a WhatsApp to a trader, feigning smokers’ withdrawal and desperation. It’s a common message because there are about six million smokers in the country and, with the extended ban on the sale of cigarettes, they have not suddenly given up smoking in an act of mass compliance. In very South African ways, plans are being made.
“Hook me up with cigarettes…” The first WhatsApp chat was fired off. The answer came: “I’m yo man, but they’re kak greedy charging the bras (friends) mad prices for gwaais (cigarettes).”
We are not smokers, so provide ballpark figures. Well-known brands of cigarettes generally sell for between R350 and R600 for a carton of 10. We ordered a top-end brand (Marlboro), a mid-range brand (Kent) and a loose box (Courtleigh) to test availability on a one-day delivery.
The salesperson could help with two cartons of Marlboro (Gold and Blue) and a pack of Courtleigh, but not with Kent. We took what we could get.
Value-add was built into the system. An ehailing driver was part of the network and he would make a home delivery for R200 cash. The cigarettes were paid for by EFT ahead of delivery. My contact knew the person, so there was a relationship of trust. The e-taxi delivery was an add-on made possible because e-hailing services have had the brakes slammed on by the strict-as-jail lockdown in South Africa.
Smoker friends tell me the price of now-contraband cigarettes have gone through the roof after the government moved from Level 5 lockdown to Level 4 and after President Cyril Ramaphosa changed his mind on cigarette sales. He announced on 23 April that sales would be allowed at Level 4, but when Co-operative Governance Minister Nkosazana Dlamini Zuma countermanded that a few days later, prices shot up.
Smokers get scalped
If you are not trading down to a no-name brand cigarette and buying it in a parking lot or a garage, where networks are as easy as a quiet ask, you are going to pay for your brand loyalty.
The next WhatsApp chat sorted out the cost: “1 x Marlboro gold R900, 1 x Marlboro blue ice R900, 1 x loose Courtleigh 60. Don’t forget 200 bucks for the uber bra (friend).” Banking details were communicated and the EFT was done.
Prices differ but, in a normal sale, Marlboro cost about R55 a box and about R500 a carton. The black-market price we paid was almost double that. While the cigarettes were delivered by what the trader said was an Uber, the term is often widely used for e-hailing taxi services. The delivery was not made on the company’s app. Uber has said that if the trip was not done on the app, it had nothing to do with the company.
Home delivery felt safer than asking about smokes in a parking lot or a garage, as SA Revenue Service Commissioner Edward Kieswetter told Parliament he had done.
“You speak to someone who knows someone who knows someone,” said a smoker from Grassy Park on the Cape Flats in Cape Town, explaining how the trade works there. “But the price is going up – it was R60, now it’s R85 (for a packet).”
In South Africa, illicit economies are never hard to find and so the cigarette & alcohol sales ban is not hard to break.
“We’ve arrested a lot of people,” said police spokesperson Brigadier Vishnu Naidoo this week, adding that cops had chalked up close to 200,000 lockdown infringements, including fines, arrests and warnings. Many of those arrested were people buying, selling and transporting cigarettes during the lockdown. Last week in Gauteng, two women were arrested for transporting R254,000 worth of cigarettes, valued at normal market prices, not black market, said Naidoo.
“People don’t understand it’s not to punish them. Remember, these are two factors (alcohol and cigarettes) which contribute greatly to a person’s health deteriorating,” complained Naidoo. It is eight years since he stopped smoking and he said he knows what tobacco addiction feels like.
Naidoo revealed that contact crime was down by between 65% and 75% according to police analysis, which he attributes directly to the alcohol sales ban. Hospital trauma units have also reported drastic falls in admission numbers.
A different state official is making a separate set of calculations.
SARS boss Kieswetter told Parliament that early calculations of excise duties were down by 54.7% year-on-year and that R1.3-billion had probably been lost to the fiscus as a result of the cigarette and alcohol bans.
“We have anecdotal evidence that the illicit sale of cigarettes and alcohol has continued during the lockdown period. Whilst the revenue impact is relatively low as a percentage of total revenue, we raise the criminality thereof as our main concern,” said Kieswetter.
Yusuf Abramjee, who runs the Tax Justice Network, commented: “The huge demand for illicit cigarettes has allowed criminals to massively hike their prices, often by at least 300%. Their business is booming and they are making money hand over fist.
“A 2017 survey by the University of Cape Town found that a third of all cigarettes sold in South Africa are illicit and no taxes are paid on them. We estimate that the illicit tobacco trade costs the South African fiscus R8-billion a year.”
For more, listen to our Daily Maverick’s Don’t Shoot The Messenger podcast on Unintended Consequences of the Lockdown.
According to Abramjee, this is how the now illegal cigarette trade operates: “There is evidence of ‘under the counter’ sales in shops, spazas and even stalls set up in car parks. Some dealers are advertising on social media. These retail outlets are being supplied by the criminal networks who operate under normal conditions (too). They smuggle illicit cigarettes from overseas, but 80% of illegal tobacco products are produced locally.”
The Tax Justice Network is an independent NGO advocating against illicit economies. Abramjee is supported in his campaign by Makali Lepholisa, a former customs commissioner in Lesotho, and Interpol ambassador Andy Mashaile. DM
Daily Maverick has lodged the cigarettes we purchased with our lawyers. We have declared the purchase to the police.
"Everything is flux" ~ Heraclitus
Daily Maverick © All rights reserved