South Africa—24 Jul 2025

South African Police takes action against counterfeit goods and illicit cigarettes

The South African Police Service (SAPS) and other stakeholders in the Free State are clamping down on the illegal trade of counterfeit goods and illicit cigarettes.

In a recent coordinated operation, the police, in collaboration with SARS Customs officials, descended on various business premises in Ladybrand and Senekal.

During the operation, seven suspects were arrested for contraventions relating to the sale of illegal goods.

Authorities also seized a significant quantity of illicit cigarettes and other counterfeit items, including unregulated skin-lightening products.

In a press statement, the South African Police said the value of the seized items is estimated at about R450,000.

This raid comes amidst a serious challenge for the government to stem the scourge of counterfeit goods and illicit cigarettes in South Africa.

Finance Minister Enoch Godongwana recently revealed that an estimated 70% of cigarettes sold in South Africa are illicit, leading to annual tax revenue losses of over R27 billion.

He said that over the past five years, South Africa’s illicit cigarette trade has escalated into a significant economic and enforcement challenge.

In April 2024, the SA Tobacco Transformation Alliance (SATTA) estimated that South Africans smoked 37 billion cigarettes in 2023, yet SARS only collected tax on 13 billion.

The organisation estimated that the lost tax revenue was at least R24 billion, as excise tax is around R1 per cigarette.

SARS’ data shows that revenue collection from tobacco and cigarette products declined from R13.4 billion in the 2015/16 fiscal year to R9.4 billion in 2024/25.

This reflects a decline of R4.0 billion (29.6%) and a 10-year compound annual growth rate of -3.8%.

In 2024, SATTA spokesperson Francois Van der Merwe stated that the illicit cigarette market now accounts for between 65% and 70% of the total market, the highest in the world.

However, it is not only illicit cigarettes which is a problem. South Africa’s illicit alcohol market is growing rapidly and is now worth R25 billion, making up 18% of the industry.

Drinks Federation SA has released new research revealing that the illicit alcohol industry’s volume has grown by 55% in South Africa since 2017.

Alarmingly, the fiscal loss has increased by 157% during the period. As a result, the National Treasury is also losing R16.5 billion in tax revenue annually to the industry.

Counterfeit goods and products are an equally big problem. South Africa’s pharmaceutical industry is a good example.

It is increasingly targeted by illicit traders looking to undercut legitimate sellers and producers and sell potentially harmful products.

Although South Africa has adequate legislation and regulations related to counterfeit goods, it fails to implement them effectively.