Three in four SA retailers stock cigarettes priced below tax threshold

Cigarettes selling for less than the minimum tax payable on a pack are available in approximately three-quarters of South African retail outlets surveyed, raising renewed concerns about illicit tobacco sales, tax compliance and the effectiveness of enforcement.

However, the finding does not mean that 75% of all cigarettes sold in South Africa are below the tax threshold.

Research conducted by Ipsos and cited by British American Tobacco South Africa (BATSA) found that cigarettes priced below the minimum collectable tax of R27.12 per pack were available in approximately 75% of surveyed stores.

IOL and eNCA reported on Tuesday that cigarette packs selling for less than R20 were found in almost 65% of outlets surveyed.

The distinction is significant. The research measures the availability of low-priced cigarettes across retail outlets, rather than their share of total cigarette sales. The findings nevertheless suggest that cigarettes priced below the applicable tax threshold are widely accessible to consumers.

Tobacco industry calls for R38 minimum price

BATSA is calling for a compulsory minimum retail price of R38 per pack, arguing that the measure would make it more difficult for manufacturers and retailers to compete through prices that appear inconsistent with tax obligations.

The company maintains that illicit tobacco sales undermine legitimate manufacturers and deprive the government of excise revenue.

An earlier Ipsos study commissioned by BATSA found that cigarettes priced below the then minimum collectable tax of R25.05 were available in 59.3% of sampled stores in 2024. That compared with 27.4% in October 2022 and 44% in March 2021.

The earlier research found particularly high availability in informal retail and wholesale channels.

However, selling cigarettes below the minimum collectable tax is an indicator warranting investigation, rather than conclusive proof that tax has been evaded in every transaction.

A compulsory retail price would also require careful consideration of competition, enforcement and consumer-market implications.

The findings add to concerns about South Africa's tobacco market at a time when established manufacturers face increasing pressure from low-cost competitors.

The central question for revenue authorities is whether the widespread availability of exceptionally cheap cigarettes reflects failures in tax collection, weaknesses in enforcement or other market practices requiring investigation.

Sources: IOL, 13 October 2026; British American Tobacco South Africa; Ipsos cigarette retail and wholesale price research, 2024 and 2026.