This article was first published by Focus on Transport on 17 October 2025
South Africa’s transport sector is once again caught in the crossfire of government policy and criminal enterprise. With Parliament’s Portfolio Committee on Health concluding hearings on the Tobacco Products and Electronic Delivery Systems Control Bill, PROFESSOR PETRUS POTGIETER writes that the stakes for freight, logistics, and border management are higher than ever.
Unlike island nations such as Australia, South Africa has thousands of kilometres of road borders to manage. The Limpopo border with Zimbabwe – a major tobacco-producing country – is especially porous. Trucks, buses, and informal carriers are routinely used to move contraband products into the country. This illicit trade already accounts for an estimated 75% of South Africa’s tobacco market, creating major headaches for customs, law enforcement, and legitimate logistics operators.
Covid-19 and the boost to illicit supply chains
During the extended Covid-era tobacco sales ban, smuggling operations became entrenched. Despite the prohibition, only a small fraction of smokers quit, and demand for cigarettes was largely met by illicit suppliers. These networks used established transport corridors – often the same ones relied upon by formal freight companies – to flood the market. Once embedded, the supply chains have proved resilient, continuing to undermine lawful trade even after restrictions were lifted.
Rising crime along transport routes
The illicit tobacco trade is not only about lost tax revenue. Organised crime groups use violence, bribery, and intimidation to secure their transport and distribution channels. In Australia, strict tobacco laws have already sparked a “tobacco war” involving arson and gang turf battles. South Africa, with weaker border controls and higher crime rates, faces even greater risks. Truck hijackings, warehouse break-ins, and cross-border smuggling are becoming part of this escalating black-market economy.
Legitimate industry under pressure
For lawful logistics providers, the economics are bleak. With excise and VAT adding R26.22 in tax to every legal pack of cigarettes, legal manufacturers and distributors are left with razor-thin margins. Retail prices in the formal sector approach R75 per pack – far above what many consumers can pay – driving even more demand to the illicit market. This siphons volumes away from compliant supply chains, hurting manufacturers, wholesalers, and the transport firms that service them.
The Revenue and Enforcement Gap
The South African Revenue Service (SARS) reports a 29.6% decline in tobacco excise revenue over the past decade. That’s without adjusting for inflation. As illicit trade grows, government loses billions, which could otherwise have been reinvested into infrastructure and transport enforcement. Instead, those funds flow into organised crime, strengthening networks that rely heavily on South Africa’s roads and freight corridors.
What it means for transport stakeholders
There are a number of implications for transport stakeholders:
- Cross-border logistics firms face increased scrutiny and delays as enforcement tightens at borders.
- Freight operators risk hijackings and cargo theft tied to contraband networks.
- Warehousing and distribution companies are pressured by parallel illicit supply chains operating outside regulation.
- Policy shifts may further distort the market, forcing legal operators to compete against untaxed, unregulated rivals.
The proposed Tobacco Bill may be framed as a public health initiative, but for the transport industry it signals deeper entanglement in South Africa’s biggest black market. Unless policy addresses the root causes – high excise taxes, weak border enforcement, and porous supply chains – it is transport and logistics networks that will remain the battlefield for this growing illicit economy.
