Mzansi's best-selling Skyflet is illegal – survey



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The Tobacco Institute of South Africa told Fin24 the creeping operational failure at the South African Revenue Service allowed a prohibited cigarette brand to sell more legitimate "competitors" in SA.

Illegal cigarette brands are easier to sneak into the shelves of retailers and wholesalers than previously feared, according to the survey and data produced by Ipsos for Tisa.

This is a shift from the claim made to the Nugent Commission that there was an instruction from the highest office of the tax agency to investigate the illegal tobacco trade being held.

The Ipsos report says that the RG Gold Leaf Tobacco brand is now the top sales brand in South Africa as a whole, "overtaking all legal brands." The Ipsos study said the brand was sold at an average price of only R10, even below even R17.85 paid to SARS on each package sold.

"The Gold Leaf Tobacco Company (GLTC) now represents 73% of the illegal cigarette market. The company is on track to become the largest tobacco company based on sales volume in the country, especially if there is a tax increase on legal cigarettes in February 2019," said the Ipsos report .

The report said cigarette producers selling below the minimum tax had expanded their distribution, while SARS had promised to crack down on them.

"Earlier this month, Nugent's Investigation Commission found that those who trade illegally in commodities such as tobacco operate with few obstacles. The Ipsos study calculates the cost of this government's failure," the report said.

The market research firm invited Fin24 on a walkabout for its sample survey on Monday. Walkabout took place in Bellville, Cape Town and surveyed top vendors and owners of brick and mortar stores that sell cigarettes in the area.

The most surprising thing about the survey is the low cost where prohibited cigarettes are sold on the streets. Some illegitimate dark cigarettes only cost 50 cents, with packaging sometimes just a little on R5.

During walkabout, table hawkers and shop owners were clearly seen selling illegal cigarette brands, although some tried to hide them.

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