BackgroundThe endgame literature recommends that, for a tobacco sales ban to be successful, several demand-side preconditions (eg, low prevalence and effective cessation support) should be in place. The South African Government imposed a ban on the sale of all tobacco and vaping products between 27 March and 17 August 2020, as part of the COVID-19 lockdown.ObjectivesTo assess how cigarette smokers responded to the sales ban, to evaluate how the ban impacted the cigarette market in South Africa and to use the South African experience to inform endgame planning.MethodsRegular preban cigarette smokers completed an online questionnaire from 4 to 19 June 2020 (n=23 631), in which they reported on their prelockdown cigarette smoking patterns, quitting behaviour (if relevant) and smoking behaviour during the ban.ResultsAbout 9% of prelockdown smokers in the sample successfully quit smoking. 93% of continuing smokers purchased cigarettes despite the sales ban. The average price of cigarettes increased by 250% relative to prelockdown prices. Most respondents purchased cigarettes through informal channels.ConclusionsThe demand-side preconditions for an effective sales ban were not in place in South Africa, making a sales ban inappropriate. The South African experience suggests that supply-side factors are also important in ensuring the success of a sales ban. These are: (1) the illicit market must be under control before implementing a sales ban; and (2) an effective sales ban needs to be synchronised with a ban on the manufacture, transport and distribution of cigarettes.
Using wave 5 of the National Income Dynamics Study (conducted in 2017), this paper investigates the market for very low-priced cigarettes in South Africa, which, in all probability, are illicit. Since the sum of the excise tax and VAT in 2017 amounted to R16.30 (1.22 USD) per pack, any cigarettes selling for R20 (1.50 USD) per pack or less are likely to be illicit, assuming reasonable production costs. By this definition, approximately 30% of cigarettes consumed in South Africa in 2017 were illicit. Illicit cigarettes are found across all nine provinces. At the margin, the purchase of illicit cigarettes is associated with lower socioeconomic characteristics, such as having lower levels of income and education. As illicit cigarettes undermine both the fiscal and health agendas of tobacco taxation policy, these results highlight the need for the South African government to implement urgently effective measures in order to curb illicit trade.
BackgroundWe estimate the size of the illicit cigarette market in low socioeconomic areas in South Africa before and after a tax increase. In 2018, the real excise tax increased by 3% and the value-added tax (VAT) rate increased from 14% to 15%. Thus, the real tax on cigarettes increased by 4%.MethodsA total of 2427 smokers were interviewed over two rounds of data collection (1234 before the tax increase and 1193 after). Data were collected in six townships across four of South Africa’s nine provinces. Smokers were asked about their most recent cigarette purchase. Cigarettes purchased for R1 (US$0.08) or less per stick are presumed illicit, based on a threshold price, which includes production costs and taxes.ResultsIn 2017 and 2018 respectively, 34.6% and 36.4% of smokers in the sample purchased illicit cigarettes. The increase in the proportion of illicit purchases was not statistically significant. Smokers with relatively low socioeconomic status, those who have low levels of education and those who are older or unemployed are most likely to purchase illicit cigarettes.ConclusionsThe illicit cigarette trade in South African townships is widespread. The government should implement an independent track and trace system to curb tax evasion. This would reduce the availability of illicit cigarettes, improve public health and increase excise tax collection.
Introduction Despite high levels of illicit trade in the tobacco market, the South African government banned the sale of tobacco products in March 2020 as part of its COVID-19 response. The ban lasted five months. We assess how the ban affected the cigarette market for a sample of smokers by comparing the price, consumption, and competitive landscapes before (March), during (May and June), and after (September) the ban. Methods We conducted three online surveys of cigarette smokers, asking about smoking behavior before, during, and after the ban. We use descriptive statistics and OLS regressions to estimate the impact of the ban on the South African cigarette market, focusing on the price of cigarettes. Results Most smokers continued smoking despite the sales ban. During the ban, prices increased by over 240%. Purchases shifted away from the normally dominant brands of the multinational tobacco companies to local/regional producers. The covariates of price changed substantially during the sales ban, the most pronounced being inter-provincial effects. After the ban, the market shifted back to its preban state, with an overall increase in price of 3.6%. Conclusions Cigarette sales continued despite the sales ban, further entrenching an already large illicit market. Had the government substantially increased the excise tax, rather than banned the sale of tobacco products, it would have achieved a similar public health outcome, received more revenue, and presumably not further entrenched the illicit market. Implications South Africa temporarily banned the sale of tobacco as part of its COVID-19 response. Despite the ban, the sale of cigarettes did not cease; rather, it caused major disruption to the cigarette market. The ban inadvertently benefited manufacturers who were previously disproportionately involved in illicit activities; these manufacturers increased their market share even after the ban was lifted. The ban may have further entrenched South Africa’s already large illicit market. Our results show that there are unintended consequences associated with a temporary ban on the sale of cigarettes.
A total of 2453 smokers were interviewed in townships over two rounds of data collection. Townships are low-income, urban areas characterised by overpopulation, poor service delivery, crime, and poor socioeconomic outcomes. Township residents typically live in poverty. Data were collected from six townships in four of South Africa's nine provinces, namely Gauteng (Eldorado Park and Ivory Park), Western Cape (Khayelitsha and Mitchell's Plain), Free State (Thabong) and KwaZulu-Natal (Umlazi). These townships were chosen to represent both the geographical and racial spread of low socioeconomic areas in South Africa. Round 1 data ( n = 1260) were collected from October to November 2017, and round 2 data ( n = 1193) were collected from July to August 2018. The sample includes two of South Africa's four population groups: African and mixed race (locally referred to as “Coloured”, which describes people of mixed Khoisan, Malay, European, and black African ancestry). Since few Whites and Asians live in townships, they were not sampled. Households were selected via a random walk through each township. One smoker per household was interviewed (if a household contained at least one available smoker). We aimed to interview 200 adult smokers (aged 18+ years) per township per round. If a household had more than one smoker, a random selection determined which smoker to interview. Respondents were asked about their most recent cigarette purchase, specifically packaging type (single stick, pack, or carton), number of items purchased, brand, type of outlet where the cigarettes were bought, and the total amount paid for cigarettes. Respondents were also asked about other tobacco use in the household, and about their perceptions regarding illegal cigarettes. Socioeconomic and demographic information was collected at the individual and household level. The data has been used to estimate illicit trade ( https://tobaccocontrol.bmj.com/content/early/2020/03/10/tobaccocontrol-2019–055136.info ), and to analyse the determinants of smoking intensity ( https://www.sciencedirect.com/science/article/pii/S2211335520300590 ).
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