Illicit cigarette trade in South Africa: 2002-2017

How Complete Are Tobacco Sales Data? Assessing the Comprehensiveness of US Tobacco Product Retail Sales Data Through Comparisons to Excise Tax Collections

INTRODUCTION

Sales data analyses are increasingly used to guide tobacco regulatory science. However, such data do not cover specialist retailers like vape shops or tobacconists. Understanding the extent of the cigarette and electronic nicotine delivery system (ENDS) markets covered by sales data is critical to establishing such analyses' generalizability and potential biases.

METHODS

Using retail sales data from Information Resources Incorporated (IRI) and Nielsen, we conduct tax gap analyses comparing states' cigarette and ENDS tax revenue to tax collection estimates based on retail sales data. For the 23 US states in both retail sales datasets, cigarette tax gap analyses were conducted for each year from 2018 to 2020. Four (Louisiana, North Carolina, Ohio, and Washington) of those 23 states levied per-unit ENDS taxes and provided monthly tax revenue data covering January 2018 to October 2021, where we conducted monthly tax gap analyses for both cigarettes and ENDS.

RESULTS

Across states covered by both sales datasets, annual mean cigarette sales in IRI and Nielsen account for 92.3% (95% CI = 88.3% to 96.2%) and 84.0% (95% CI = 79.3% to 88.7%) of state cigarette tax revenue, respectively. Monthly average coverage rates for ENDS sales were lower, ranging from 42.3% to 86.1% for IRI and 43.6% to 88.5% for Nielsen, but remained stable over time.

CONCLUSIONS

IRI and Nielsen sales data capture almost the entire US cigarette market and a substantial but lower portion of the US ENDS market. With proper care to address shortcomings, sales data analyses can capture changes in the US market for these tobacco products.

IMPLICATIONS

Policy evaluations and analyses using e-cigarette and cigarette sales data are often criticized because these data do not cover online sales or sales by specialty retailers like tobacconists. Cigarette sales data consistently cover nearly 90% of taxed sales, while e-cigarette sales data cover around 50% of taxed volumes. Retail sales data capture nearly all cigarette sales and a substantial portion of ENDS sales with relatively stable rates of coverage over time, supporting their continued use in tobacco surveillance and policy evaluation work.

Magnitude of illicit cigarette trade in Malaysia: empirical evidence compared with industry studies

BACKGROUND

The tobacco industry contends that the illicit market in Malaysia occupies 62.3% of the total cigarette market. If this is true, Malaysia has one of the largest shares of illicit cigarettes in the world.

METHODS

This study employs a rigorous gap analysis to measure the size of the illicit cigarette trade in Malaysia and compare it with the industry estimates.

FINDINGS

We found that in 2019, the illicit cigarette market share ranged from 38.2% to 52.5%, depending on assumptions with respect to consumption under-reporting, which is substantially less than the industry estimates. We found that the size of the illicit cigarette market was not driven by higher excise tax: doubling the excise tax rate from RM0.20 to RM0.40 per stick in November 2015 resulted in only a slight increase in the illicit cigarette market share and no increase in the number of illicit cigarettes in the market.

CONCLUSIONS

Therefore, a reduction in cigarette excise taxes, as suggested by the industry, will not solve the problem of illicit cigarette trade in Malaysia. Instead, the government should ratify the Framework Convention on Tobacco Control's Protocol to Eliminate Illicit Trade in Tobacco Products and implement the strategies outlined in the protocol.

Tax revenue lost due to illicit cigarettes in South Africa: 2002-2022

OBJECTIVE

To estimate lost excise and value-added tax (VAT) revenue as a result of illicit cigarette trade from 2002 to 2022.

DESIGN

Using gap analysis, we estimated the number of illicit cigarettes by calculating the difference between the number of self-reported cigarettes (derived from nationally representative surveys) and the number of legal (tax-paid) cigarettes (derived from government sources) from 2002 to 2022. We then calculated the excise and VAT revenue that the government lost through illicit trade, taking into account that some people would have quit or reduced their consumption if cigarette prices had been higher (ie, tax paid).

SETTING

South Africa.

OUTCOME MEASURES

Illicit trade estimates and lost revenue estimates.

RESULTS

The illicit cigarette market comprised 5% of the market in 2009, peaked at 60% in 2021, and decreased to 58% in 2022. Accounting for the fact that some people would have reduced their consumption if cigarette prices had been higher (had the illicit marke not existed), the government lost R15 billion in excise revenue and R3 billion in VAT revenue in 2022. From 2002 to 2022, the government lost R119 billion (2022 prices) in excise and VAT revenue. The majority of the lost revenue occurred in the period 2010 to 2022, where R110 billion (2022 prices) in excise and VAT revenue was lost. A comprehensive sensitivity analysis indicates that the estimated lost revenue of R119 billion from 2002 to 2022 falls within the range of R65 billion to R130 billion (all 2022 prices).

CONCLUSIONS

The South African government has been losing a significant amount of revenue by not receiving excise and VAT from all cigarettes consumed in South Africa. This trend is likely to continue if the government does not secure the supply chain from the point of production to the point of sale.

How much to pay for a track and trace system: a simulation model for South Africa

BACKGROUND

The illicit trade in tobacco reduces the effectiveness of tobacco-control policies. Independent track and trace (T&T) systems are considered one of the most effective measures available to reduce the illicit tobacco trade. South Africa, with an illicit trade estimated at over 35% of the total market, is yet to implement a T&T system.

METHODS

An Excel-based simulation model is used to determine the break-even T&T marker cost per pack. At the break-even cost per pack, the government would recover all costs associated with implementing T&T by collecting additional revenues. We conduct a scenario analysis to provide a range of break-even marker costs.

FINDINGS

A marker cost of between R2.68 (US$0.17) and R5.24 (US$0.34) per pack allows the South African government to collect enough additional revenue to recover all costs associated with T&T. Implementing such a system would reduce cigarette consumption by between 5% and 11.5%. Given that comparable systems cost significantly less than this range (roughly US$0.02 per pack), the government would in all likelihood be able to implement a system at a cost below the break-even rate, thus generating additional revenue.

CONCLUSION

The break-even simulation model provides a practical tool for the government to plan the implementation of T&T and to set up an evaluation criteria for the T&T tender process. The simulations illustrate that implementing T&T in South Africa would both reduce consumption (licit and illicit) and generate additional revenue. With some modifications, the model can be applied to other countries as well.

Improving estimates of the illicit cigarette trade through collaboration: lessons from two studies of Malaysia

This paper critically analyses contrasting estimates of Malaysia's illicit cigarette trade in 2011, 2015 and 2019 by Bui et al and Koya et al who previously produced independent estimates at about the same time using tax gap analysis. Collaboration between the two authors' teams emerged due to the discrepancies in their results, generating this paper to explore the methodological issues identified and hence produce revised estimates of the rate of illicit. Key issues identified were: Bui et al's assessment of legally imported cigarettes impacting all years; their exclusion of ad valorem duty affecting the 2011 and 2015 estimates; Koya et al overlooked the value of cigarettes for export market in their ad valorem calculation and used the sales value of imported tobacco/tobacco products, not just cigarettes, both of which impact estimates for 2011 and 2015. Recalculations using Koya et al's consumption data reveal that in 2019, illicit cigarettes accounted for about 70% of the market, which is higher than Bui et al's estimate (38%) but slightly lower than Koya et al's (72%). For 2011 and 2015 where ad valorem applied, the corrected estimates show a share of the illicit cigarette market of approximately 41.1% and 52.7%, respectively, differing from Bui et al's 0% in 2011 and 29.6% in 2015, and Koya et al's 51% in 2011 and 55% in 2015. This paper provides essential lessons for addressing methodological issues between authors' teams and updated estimates of Malaysia's illicit cigarette trade, verifying that Malaysia faces a substantial illicit cigarette trade problem.

Illicit trade and real prices of cigarettes in Chile

INTRODUCTION

The tobacco industry claims that tobacco taxes are responsible for increased illicit trade in Chile, which they estimated at 37% in 2022. However, the evolution of cigarette consumption, estimated from population surveys, and of tax-paying cigarettes shows a decreasing penetration of illicit trade since 2018.

METHODS

A gap analysis was used to estimate the evolution of illicit trade based on an arithmetic identity stating that total national cigarette consumption over a given period is equal to the registered consumption as paying taxes plus the cigarettes that are consumed nationally without paying taxes.

RESULTS

Illicit trade penetration in Chile was around 10% in 2020, less than half of what the tobacco industry claimed. In addition, the evolution of real prices of cigarettes, calculated using tax collection data, indicates that real prices net of tobacco taxes increased significantly during 2015-2021, a period with no changes in tobacco taxation. The cheapest cigarettes, presumably competing with illicit cigarettes, registered the most significant price increase.

CONCLUSIONS

Claims of increasing illicit trade penetration in Chile are unfounded and are not supported by data on consumption and tax-paying cigarettes.

A Media Analysis of the COVID-19 Tobacco Sales Ban in South Africa

The South African government introduced a nationwide lockdown in March 2020 to mitigate the spread of COVID-19. Among other restrictions, the government banned the sale of tobacco products. The ban lasted for nearly five months. We performed a Google search using the keywords smok*, puff*, lockdown, tobacco, and cigarette* for articles published in English from 23 March 2020 to 18 December 2020. This yielded 441 usable online media articles. We identified and categorised the main arguments made by proponents and opponents of the tobacco sales ban. Three themes were identified: medical, legal, and economic/financial. Legal aspects were covered in 48% of articles, followed by economic (34%), and medical aspects (18%). The media was generally ambivalent about the tobacco sales ban during the first five weeks of lockdown. Sentiment subsequently turned against the ban because the medical rationale was not well communicated by the government. There was limited empirical evidence of a link between smoking and contracting COVID-19, and the sales ban was ineffective since most smokers still purchased cigarettes. Policy framing in the media plays an important role in how the public receives the policy. Any future tobacco control policy intervention should be better considered, especially within the context that cigarettes are easily accessed on the illicit market in South Africa.

How has the tobacco industry passed tax changes through to consumers in 12 sub-Saharan African countries?

INTRODUCTION

Tobacco taxation is only effective in reducing consumption when it is translated into higher prices. This study aims to investigate to what extent the tobacco industry (TI) passes tax increases over to consumers by increasing the retail price of cigarettes in 12 sub-Saharan African (SSA) countries.

METHODS

African Cigarette Prices Project and WHO's Global Tobacco Epidemic Reports data were used to calculate the rate of tax pass-through by decomposing the retail price of cigarettes into tax and net prices between 2016 and 2020. Percentage change in net price was used to identify industry pricing behaviour, in both packs and single-stick sales. TI pricing strategies were examined by country, producer type, producers, and cigarette price segment.

RESULTS

There were mixed TI strategies, with taxes primarily overshifted (Botswana, Madagascar, Tanzania, Zimbabwe), undershifted (Ethiopia, Lesotho, Mozambique, Namibia, South Africa, Zambia) or a mix of both (Malawi, Nigeria). The detail varied between countries, over time, and between the different brands/segments offered. Patterns for single-stick sales were broadly similar to that of packs but with some differences observed in particular countries/years. Pricing strategies for the various transnational tobacco companies and domestic producers were similar but the changes in net price for the latter were larger. The country tax level/type and the size of tax change did not seem to be an obvious influence.

CONCLUSION

This paper provides an overview of TI pricing strategies in response to tax increases in SSA. Governments must monitor how the TI responds to tax changes to ensure that tax increases are effective in impacting price.

Quitting behavior during the tobacco sales ban in South Africa: Results from a broadly nationally representative survey

INTRODUCTION

In response to COVID-19, the South African government banned the sale of tobacco products for 20 weeks. Before the ban, the illicit cigarette market was well-entrenched and smoking cessation services were not widely available. Several surveys conducted to ascertain cigarette smokers' responses to the ban reported substantial differences in the proportion of smokers who quit. This study provides a broadly nationally representative ex-post investigation into cigarette smokers' quitting behavior related to the sales ban.

METHODS

We used data from wave three of NIDS-CRAM (the National Income Dynamics Study-Coronavirus Rapid Mobile Survey) conducted in November-December 2020. We first investigated the proportion of people who quit and who continued smoking during and after the sales ban. We subsequently linked the NIDS-CRAM survey to the fifth wave of NIDS (2017) to identify a subset of established smokers, and considered whether their quitting behavior differed from that of all smokers who smoked at the start of the sales ban.

RESULTS

The cross-sectional analysis showed that 7.8% of cigarette smokers quit during the sales ban, but that 55% of these quitters relapsed after it was lifted. Of the pre-ban smokers, 3.5% indicated that they did not smoke both during and after the sales ban, and 3.7% quit after the ban was lifted. The longitudinal analysis showed that 7% of people who were smoking in 2017, quit smoking cigarettes during the tobacco sales ban, but that >70% of quitters relapsed after it was lifted. Only 2% of pre-ban established smokers indicated that they did not smoke during or after the ban.

CONCLUSIONS

The sales ban did not have the intended objective of encouraging large-scale smoking cessation. This reflects policy failures to provide smokers with appropriate cessation support and to effectively control the illicit market both prior to and during the sales ban.

An overlooked market: loose cigarettes, informal vendors and their implications for tobacco taxation

OBJECTIVE

To examine the features of markets for loose cigarettes in several low-income and middle-income countries and their effects on tobacco control policies, particularly taxation.

DESIGN

An analysis of survey data targeting people who smoke in two African, one Southeast Asian and two South Asian countries and retailers across 16 African countries to study loose cigarette markets and examine how prices in these markets move relative to the prices for cigarette packs.

RESULTS

Markets for loose cigarettes are large, and their consumer base tends to differ from the wider population of people who smoke. Loose cigarette prices are on average higher than those of cigarettes bought in packs, and they respond differently to tax increases, at least partially due to a denomination effect.

CONCLUSIONS

The features of the loose cigarette markets present a challenge for tobacco control policy, especially tobacco tax policy. One way to overcome this challenge is to aim for large, rather than incremental, tax increases.

HOW COMPLETE ARE TOBACCO SALES DATA? ASSESSING THE COMPREHENSIVENESS OF TOBACCO PRODUCT RETAIL SALES DATA THROUGH COMPARISONS TO EXCISE TAX COLLECTIONS

Introduction

Sales data analyses are increasingly used to guide tobacco regulatory science. However, such data do not cover specialist retailers like vape shops or tobacconists. Understanding the extent of the cigarette and electronic nicotine delivery system (ENDS) markets covered by sales data is critical to establishing such analyses' generalizability and potential biases.

Methods

Sales data from Information Resources Incorporated (IRI) and Nielsen Retail Scanner data are used to conduct a tax gap analysis, comparing state tax collections based on cigarette and ENDS sales data to states' annual 2018-2020 cigarette tax collections and monthly ENDS and cigarette tax revenue data for January 2018 to October 2021. Cigarette analyses consider the 23 US states covered by both IRI and Nielsen. ENDS analyses consider the subset of those states with per unit ENDS taxes: Louisiana, North Carolina, Ohio, and Washington.

Results

Across states covered by both sales datasets, IRI's mean cigarette sales coverage was 92.3% (95% CI 88.3-96.2%), while Nielsen's was 84.0% (95% CI 79.3-88.7%). Coverage rates for average ENDS sales were lower, ranging from 42.3% to 86.1% for IRI and 43.6% to 88.5% for Nielsen, but remained stable over time.

Conclusions

IRI and Nielsen sales data capture almost the entire US cigarette market and, while coverage rates are lower, a substantial portion of the US market for ENDS as well. Coverage rates are relatively stable over time. Thus, with proper care to address shortcomings, sales data analyses can capture changes in the US market for these tobacco products.

Extent of illicit cigarette market from single stick sales in Ghana: findings from a cross-sectional survey

OBJECTIVE

This study aims to measure the extent of illicit cigarette consumption from single stick sales, to determine the nature and types of illicit cigarettes present in Ghana, and to identify the factors associated with illicit cigarette consumption in Ghana.

DESIGN

A cross-sectional study using empty cigarette packs generated by 1 day's single stick cigarette sales collected from cigarette vendors.

SETTING

Five large cities (Accra, Kumasi, Takoradi, Tamale and Bolgatanga) and three border towns (Aflao, Paga/Hamele and Elubo) in the northern, middle and coastal belt of Ghana.

PROCEDURE AND PARTICIPANTS

Ten areas were randomly selected in each city/town, and all shops selling cigarettes within 1 km of the central point were surveyed.

OUTCOME MEASURES

(1) Estimates of the share of illicit cigarette packs in the total cigarette sales from vendors selling single stick cigarettes in Ghana; (2) nature and types of illicit cigarette packs; (3) factors associated with illicit cigarette sales in Ghana.

RESULTS

Of a total of 4461 packs, about 20% (95% CI 18.3 to 20.7) were found to be illicit. Aflao (Ghana-Togo border) and Tamale (Ghana-Burkina Faso border) had the highest percentage of illicit cigarette sales at 99% and 46%, respectively (p<0.001). Over half of the illicit packs originated from Togo (51%), followed by Nigeria (15%) and then Cote d'Ivoire (10%). Adjusted and unadjusted logistic regression models indicated that convenience stores, border towns, pack price and the northern zone had higher odds of illicit cigarette sales.

CONCLUSION

To effectively tackle illicit cigarettes, market surveillance and strengthening supply chain control are required, particularly at the border towns and the northern region of the country.

When Cigarette Sales Suddenly Become Illegal: Evidence From an Online Survey of South African Smokers During COVID-19 Lockdown

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.

Prevalence and correlates of roll-your-own cigarette smoking among South African adults during 2010–2011 and 2017–2018

INTRODUCTION

The increasing use of roll-your own (RYO) cigarettes has been documented globally, but there are no recent data from South Africa, particularly among youths and low-income groups. We assessed changes in prevalence and correlates of RYO smoking among South African adults during 2010–2011 and 2017–2018, and explored expenditure differences between daily smokers of RYO and manufactured cigarettes.

METHODS

Nationally representative data of South Africans aged ≥16 years used in this study were from the South African Social Attitudes Survey (SASAS) for 2010–2011 (n=6116), and 2017–2018 (n=5799). Current RYO cigarette use included daily and non-daily use. Annual expenditures were estimated based on typical usage patterns for daily users. Descriptive and multivariable analyses were performed using Stata Version 15 with the level of statistical significance set at p<0.05.

RESULTS

The prevalence of ever RYO cigarette use increased from 6.5% (95% CI: 5.6–7.5) during 2010–2011, to 8.5% (95% CI: 7.0–10.0) during 2017–2018 (p=0.026). Current RYO cigarette use prevalence however remained largely unchanged when we compared 2010–2011 to 2017–2018 (5.2% vs 6.3%, p=0.544). During 2017–2018, current RYO cigarette use prevalence was highest among men (11.6%), those who self-identified as Coloreds (11.1%), people aged 25–34 years (7.8%), those with no schooling (7.5%), and those unemployed (9.8%). Annual expenditures associated with typical patterns of daily RYO cigarette smoking were substantially less than for smoking of manufactured cigarettes.

CONCLUSIONS

The prevalence of ever RYO cigarette use increased between 2010–2011 and 2017–2018. Current RYO cigarette use during 2017–2018 was more prevalent among Coloreds, Black Africans, youths, those with lower education, and the unemployed. This study’s findings highlight the need to harmonize taxation of cigarettes and RYO cigarettes, and to intensify implementation of evidence-based tobacco control and prevention interventions in South Africa.

The temporary ban on tobacco sales in South Africa: lessons for endgame strategies

BACKGROUND

The 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.

OBJECTIVES

To 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.

METHODS

Regular 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.

RESULTS

About 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.

CONCLUSIONS

The 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.

Estimating the changing disease burden attributable to smoking in South Africa for 2000, 2006 and 2012

Background. Ongoing quantification of the disease burden attributable to smoking is important to monitor and strengthen tobacco control policies.Objectives. To estimate the attributable burden due to smoking in South Africa for 2000, 2006 and 2012.Methods. We estimated attributable burden due to smoking for selected causes of death in South African (SA) adults aged ≥35 years for 2000, 2006 and 2012. We combined smoking prevalence results from 15 national surveys (1998 - 2017) and smoking impact ratios using national mortality rates. Relative risks between smoking and select causes of death were derived from local and international data. Results. Smoking prevalence declined from 25.0% in 1998 (40.5% in males, 10.9% in females) to 19.4% in 2012 (31.9% in males, 7.9% in females), but plateaued after 2010. In 2012 tobacco smoking caused an estimated 31 078 deaths (23 444 in males and 7 634 in females), accounting for 6.9% of total deaths of all ages (17.3% of deaths in adults aged ≥35 years), a 10.5% decline overall since 2000 (7% in males; 18% in females). Age-standardised mortality rates (and disability-adjusted life years (DALYs)) similarly declined in all population groups but remained high in the coloured population. Chronic obstructive pulmonary disease accounted for most tobacco-attributed deaths (6 373), followed by lung cancer (4 923), ischaemic heart disease (4 216), tuberculosis (2 326) and lower respiratory infections (1 950). The distribution of major causes of smoking-attributable deaths shows a middle- to high-income pattern in whites and Asians, and a middle- to low-income pattern in coloureds and black Africans. The role of infectious lung disease (TB and LRIs) has been underappreciated. These diseases comprised 21.0% of deaths among black Africans compared with only 4.3% among whites. It is concerning that smoking rates have plateaued since 2010. Conclusion. The gains achieved in reducing smoking prevalence in SA have been eroded since 2010. An increase in excise taxes is the most effective measure for reducing smoking prevalence. The advent of serious respiratory pandemics such as COVID-19 has increased the urgency of considering the role that smoking cessation/abstinence can play in the prevention of, and post-hospital recovery from, any condition.

Overview

BACKGROUND

South Africa (SA) faces multiple health challenges. Quantifying the contribution of modifiable risk factors can be used to identify and prioritise areas of concern for population health and opportunities for health promotion and disease prevention interventions.

OBJECTIVE

To estimate the attributable burden of 18 modifiable risk factors for 2000, 2006 and 2012.

METHODS

Comparative risk assessment (CRA), a standardised and systematic approach, was used to estimate the attributable burden of 18 risk factors. Risk exposure estimates were sourced from local data, and meta-regressions were used to model the parameters, depending on the availability of data. Risk-outcome pairs meeting the criteria for convincing or probable evidence were assessed using relative risks against a theoretical minimum risk exposure level to calculate either a potential impact fraction or population attributable fraction (PAF). Relative risks were sourced from the Global Burden of Disease, Injuries, and Risk Factors (GBD) study as well as published cohort and intervention studies. Attributable burden was calculated for each risk factor for 2000, 2006 and 2012 by applying the PAF to estimates of deaths and years of life lost from the Second South African National Burden of Disease Study (SANBD2). Uncertainty analyses were performed using Monte Carlo simulation, and age-standardised rates were calculated using the World Health Organization standard population.

RESULTS

Unsafe sex was the leading risk factor across all years, accounting for one in four DALYs (26.6%) of the estimated 20.6 million DALYs in 2012. The top five leading risk factors for males and females remained the same between 2000 and 2012. For males, the leading risks were (in order of descending rank): unsafe sex; alcohol consumption; interpersonal violence; tobacco smoking; and high systolic blood pressure; while for females the leading risks were unsafe sex; interpersonal violence; high systolic blood pressure; high body mass index; and high fasting plasma glucose. Since 2000, the attributable age-standardised death rates decreased for most risk factors. The largest decrease was for household air pollution (-41.8%). However, there was a notable increase in the age-standardised death rate for high fasting plasma glucose (44.1%), followed by ambient air pollution (7%).

CONCLUSION

This study reflects the continued dominance of unsafe sex and interpersonal violence during the study period, as well as the combined effects of poverty and underdevelopment with the emergence of cardiometabolic-related risk factors and ambient air pollution as key modifiable risk factors in SA. Despite reductions in the attributable burden of many risk factors, the study reveals significant scope for health promotion and disease prevention initiatives and provides an important tool for policy makers to influence policy and programme interventions in the country.

Illicit trade in tobacco products: recent trends and coming challenges

BACKGROUND

Illicit trade in tobacco products is a menace to the goal of eliminating tobacco consumption. Although tax policy is very effective in reducing consumption, illicit trade can reduce (though not eliminate) its effectiveness.

METHODS

This article discusses the recent evolution of illicit trade and the context in which it occurred; the new methods that have been developed to measure it and, finally, the challenges in the next phase in the control of illicit trade.

RESULTS

There has been a remarkable stability in the penetration of cigarette illicit trade in the past decade. Such a stability, however, occurred in a world of shrinking tobacco consumption, implying a decreasing absolute illicit trade. Most countries have progressed in increasing tobacco taxes and changing tax structures. Prices of illicit cigarettes follow legal cigarette prices. Concomitantly, many new studies, independent from the tobacco industry, have been conducted allowing for better understanding of the illicit trade and providing inputs to its solution. The entry into force of the WHO FCTC Protocol to Eliminate Illicit Trade in Tobacco Products provides both a global and a national policy framework to further curb illicit trade. Instruments such as track-and-trace systems must be promoted and adopted to maximise reductions in illicit trade.

CONCLUSIONS

Global efforts to curb the illicit trade in tobacco products are gaining momentum and progress has been made in many parts of the world. The next decade can witness a decisive decrease in tobacco consumption, both licit and illicit, if countries further engage in international collaboration.

Estimating the price elasticity of demand for cigarettes in South Africa using the Deaton approach

OBJECTIVE

To estimate the price elasticity of demand for South Africa and thereby contribute to growing the evidence base of the likely impact of excise taxes on cigarette demand in low-income and middle-income countries.

METHODS

We employ the Deaton method, using wave 5 data from the South African National Income Dynamics Study, to estimate the cigarette price elasticity for South Africa. We used a sample of 6820 households.

RESULTS

Of the 6 820 households in the sample for which we had sufficient data, 1341 (19.7%) spent money on tobacco. The price elasticity of demand for cigarettes is estimated at -0.86 (95% CI -1.37 to -0.35), implying that the demand for cigarettes in South Africa declines by 8.6% for every 10% increase in price.

CONCLUSION

The negative price elasticity estimate for South Africa indicates that increases in the excise tax are particularly effective in controlling cigarette consumption. However, given the presence of a significant illicit tobacco market in the country, it is important that authorities augment tax measures with strategies that curb the illicit trade in cigarettes.

Measuring the illicit cigarette market in the absence of pack security features: a case study of South Africa

There are several ways to measure the illicit cigarette market. In South Africa, different methods were used to triangulate results. The aim of this paper is to assist researchers to decide which method is most suitable to their context, especially for countries that do not have security features on cigarette packs (eg, tax stamps). We analysed the methods and results from three published articles that used various approaches to measure cigarette illicit trade in South Africa: (1) gap analysis, (2) price threshold method using secondary data from a national survey, and (3) price threshold method using primary data collected in low socioeconomic areas. We provide methodological insights and background information. We discuss the advantages and disadvantages of each method. The method chosen by researchers will depend on data availability, the existence or absence of security features on cigarette packs and funding. Researchers investigating illicit trade should use more than one method to increase confidence in the obtained results.

Potential revenue from taxing e-cigarettes and comparison of annual costs of daily e-cigarette use versus daily cigarette smoking among South African adults

INTRODUCTION

To inform policy making under the proposed The Control of Tobacco and Electronic Delivery Systems Bill, we compared annual costs of using e-cigarettes versus cigarettes, and estimated revenue from e-cigarette taxation.

METHODS

We extracted e-cigarette retail prices from 231 South African e-cigarette vendor websites. We compared annual costs associated with daily cigarette smoking (self-reports from daily smokers in the 2018 South African Social Attitudes Survey, SASAS) versus daily e-cigarette use (based on cumulative costs of consumables plus device costs). We estimated revenue from excise tax if e-cigarettes were taxed at 75% (the rate proposed by the government) and 37.5% (half of the government’s proposal as a hypothetical scenario) of the cigarette excise rate. We applied the different rates to e-cigarette consumption in 2018 SASAS and projected for 2021.

RESULTS

Mean annual cost associated with daily use was ZAR 6693 (US$460.32, based on an exchange rate of about 69 US$ to 1000 ZAR) for manufactured cigarettes; for e-cigarettes, this ranged from ZAR 8574.69/year (with price minimizing strategies) to ZAR 19780.83/year (retail products exclusively). Expected revenue from e-cigarette excise tax at 75% of the cigarette tax rate was up to ZAR 2.20 billion (95% CI: 0.96–3.44). If taxed at 37.5% of the cigarette tax rate – half of the government’s proposed rate – the projected revenue was up to ZAR 1.10 billion (95% CI: 0.48–1.72). Of the projected revenue from e-cigarette excise tax at 75% of the cigarette rate, the portion attributable to hardware (device and batteries) was 61% (ZAR 1.35 billion), while the portion attributable to e-liquid was 39% (ZAR 0.86 billion).

CONCLUSIONS

Calculated daily costs were higher for e-cigarettes than cigarettes. We recommend an e-cigarette excise tax. The government’s proposed tax rate may reduce youth e-cigarette access, while allowing adult smokers wishing to switch exclusively to e-cigarettes to reduce their tobacco-related harm.

Illicit Tobacco in Lithuania: A Cross-Sectional Survey

Taxation policies are the most cost-effective measure to reduce overall tobacco consumption. However, cigarettes in Lithuania are among the cheapest in the European Union. The threat of the illicit trade is often used to compromise evidence-based policies, pricing policies particularly. The aim of this study was to determine the extent of illicit cigarette consumption in Lithuania and identify the main characteristics of illicit cigarette smokers. The national cross-sectional survey with direct observation of the latest purchased pack of cigarettes was conducted between August and September 2019. In total, 1050 smokers aged ≥18 were interviewed face-to-face. The illicit share of the total consumption of cigarettes per year was 10.7% with 9.7% of smokers showing or describing illicit cigarette packs compared to 17% reported by industry-funded studies. Older smokers, smokers with lower education and heavy smokers were more likely to regularly purchase illicit cigarettes. The average price of an illicit pack was almost two times lower than licit. Although the illicit trade of tobacco products is a serious policy challenge, the threat of an increase in illicit trade should not delay tobacco taxation improvements.

The illicit cigarette market in six South African townships

Background

We 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%.

Methods

A 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.

Results

In 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.

Conclusions

The 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.