The illicit trade in tobacco has become a problem for governments to control and regulate. Sin tax, a form of excise tax, is specifically levied on certain goods deemed to be harmful to consumer health. These taxes have negatively impacted on the profits of some manufacturers, and as a result has opened up the market for illicit trade in tobacco. Some trademark owners have decided to circumvent the payment of taxes. Other forms of illicit trade in tobacco have resulted in cheaper counterfeit cigarettes being sold to consumers.
Some Important Facts:
- The problem of illicit cigarette trade has almost trebled in recent times in South Africa.
- Even legitimately produced cigarettes are being stolen by organised crime units, whilst in transit and being sold in the black market. This further decreases the profit margins of legitimate cigarette manufacturers.
- Consumers and some manufacturers alike look to save money by evading taxes.
- Counterfeit cigarette traders take advantage of the easy border entry across Africa and the world.
Pagemark Africa for Illicit Cigarette Trade:
- When cigarettes are stolen in transit, the unique serialised numbers of the stolen batch can be flagged on the system. When law enforcement scans the codes during searches or raids, they would immediately be able to establish that the cigarettes found were stolen.
- Geo-tracking of products is possible with the Pagemark Africa Track and Trace software. If a coded product is scanned in an unplanned destination or in numerous locations in a short space of time, the software notifies the manufacturer of this diversion.
- The Pelta™ solution can turn the cigarette consumer into the company watchdog. Manufacturers can implement reward and loyalty programmes. If consumers scan the 2D code on the cigarette box and provide relevant information, consumers could be rewarded for doing so. When fake codes are scanned, the geolocation of these codes can be established for further investigation by law enforcement.