South Africa’s tobacco industry is stepping up its campaign against illicit cigarette producers with a new educational campaign aimed at helping smokers to distinguish between legal and illicit products.
The ‘Know What You Smoke’ campaign is hinged on an animated video that explains how the price of a packet of 20 cigarettes is the best way to identify illicit cigarettes.
“It’s all in the price,” says Zacharia Motsumi, spokesperson for the South Africa Tobacco Transformation Alliance (SATTA) – the voice of South Africa’s legal tobacco industry value chain.
“Just the cost of the taxes on a packet of 20 amounts to R21.60. That covers excise duty and VAT on excise only. But it doesn’t include anything else – like the tobacco, the processing, manufacturing, distribution, wholesale or retail.
“So, if you see a pack of 20 on sale for less than R21.60, you should know there’s probably something wrong with it. Somewhere, somehow, the cigarettes are probably not fully compliant, or legal.
“And in that case, it’s best to avoid them altogether – or, if you can, report the matter to the police or other authorities.”
Motsumi says research by IPSOS has shown that a packet of 20 illicit cigarettes can be bought for as little as R6, with the average price of illicit packs being between R18 and R22.
“There is no way these products can be sold so cheaply, and the manufacturers are still paying taxes. We are now on an all-out campaign to explain this to smokers, and to expose how the illicit traders are getting away with tax evasion.”
SATTA does this in the Know What You Smoke video by demonstrating the costs involved in the various stages of the tobacco industry value chain, from “seed to smoker”.
“At SATTA, we are committed to producing quality cigarettes; adhering to all the regulations and paying the necessary taxes,” says Motsumi.
“Buying a pack of 20 for less than the minimum collectable tax of R21.60 means supporting illicit trade and, in the process, stealing taxes, putting tobacco farmers, processors and manufactures out of work, undermining the economy and supporting the wrong people.
“Our appeal to smokers is: know what you smoke, and in that way avoid the tax-dodgers. Let’s buy legal and protect the legal tobacco industry.”
Motsumi emphasised that SATTA supports all law enforcement agencies that are involved in the campaign against illicit traders and was heartened by recent actions by SARS, in particular, that had led to the confiscation of consignments of illicit cigarettes.
“There is no doubt that the law enforcement agencies have increased their efforts in recent months, and we welcome that. Now, we are empowering consumers themselves so that they too can play a role: by recognizing and avoiding illicit products, and reporting these to the authorities.
“We need a national effort to combat the illicit traders. That means law enforcement agencies, organisations like SATTA, and consumers themselves. We all have to work together to stop the illicit trade – it is robbing tobacco farmers of their income, jeopardising jobs in the processing and manufacturing sector, and stealing millions from the fiscus every month. It has to stop.”
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The full ‘Know What You Smoke’ video can be viewed at:
Download Video: https://1drv.ms/v/s!AvnAJoMNDXqohOlnPZaz51zAYdX5SA?e=aBRuQz
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YouTube: SA Tobacco Transformation Alliance – https://youtube.com/channel/UCrK3LuLr8GgvVB8BqOj-daQ
The script of the video is as follows:
A cigarette can mean many different things to different people, but have you ever wondered where your cigarette comes from, or how it is made? Or why it costs what it costs?
Getting a pack of 20 in your hands is a huge undertaking and involves an entire value chain with a multitude of steps.
See, your cigarette starts out life at a farm, with farmers planting thousands of tobacco seeds.
After spending months of nurturing, and tending to the tobacco plants, the leaves are harvested.
To ensure the best quality for consumption, the tobacco is dried in a processor under strictly controlled conditions.
Once dried, workers transform the tobacco into products under strictly controlled conditions.
That’s finally when your cigarette makes its way to the shelf and is then sold to people over 18, under strictly controlled conditions.
Well… at least, that’s how legal cigarettes are produced and sold… There are also some cigarettes that aren’t produced and sold illegally.
These illicit cigarettes are quite different, in a whole range of ways. For starters, it’s difficult to know who plants the tobacco seeds and how the crops are nurtured.
It’s also not clear where the tobacco is grown and who ends up harvesting the crops.
There is also a great deal of uncertainty around how the tobacco is dried and under what conditions. Or how and where the actual cigarettes are made, and by who.
All these factors contribute to the nature and quality of the product we consume.
There is also the matter of taxes…
See, taxes make up the bulk of the cost of a packet of cigarettes – almost 55% to 60%, in fact — and people who sell cheap cigarettes are only able to do so because they’re not paying tax.
This means that money is leaving the public/country and worse yet, it’s leaving the system to support unregulated and potentially harmful tobacco practices.
So, what’s the best way to know if a packet of cigarettes is “illicit”?
The answer lies in the price!
Just the cost of the taxes on a packet of 20 amounts to R21.60. That covers excise duty and VAT. But it doesn’t include anything else – like the tobacco, the processing, or the manufacturing.
So, if you see a pack of 20 on sale for less than R21.60, you should know there’s probably something wrong with it. Somewhere, somehow, the cigarettes are probably not fully compliant, or legal.
And in that case, it’s best to avoid them altogether – or, if you can, report the matter to the police or other authorities.
At SATTA, we are committed to producing quality cigarettes, adhering to all the regulations, and paying the very necessary taxes.
Buying a pack of 20 for less than the minimum price means supporting illicit trade and, in the process, stealing taxes, putting tobacco farmers, processors and manufacturers out of work, undermining the economy and supporting the wrong people.
Let’s buy legal and protect the legal tobacco industry.
That’s why we say:
Know what you smoke. It’s all in the price.