Combating Illicit Trade: A Corporate Lawyer's Dilemma

Abstract

The tobacco industry in South Africa is currently struggling with the threat of smuggled illicit products eroding the legal market. The illegal trade in cigarettes is the fastest growing tobacco category both globally and locally, with the incidence having almost doubled in South Africa over the past four years. This coincided with the economic downturn which, in most instances, caused consumers to downgrade to cheaper products. The legal industry estimates the incidence of illegal products in the South African market at between 23 and 28%. This is in stark contrast to a global incidence of 12%.