'Traditional cigarette brands drop from 75% share to under 20% during lockdown'

44 days ago

The sale of cigarettes was banned in South Africa under lockdown regulations under the Disaster Management Act to help mitigate the impact of the Covid-19 pandemic, according to government.

UCT’s Research Unit on the Economics of Excisable Products (Reep) is conducting a third survey among smokers in lockdown.

Reep conducted its first survey at the beginning of April and the second one in the first weeks of June.

Reep's second survey indicated the cigarette ban had not had the desired impact on behaviour that the policy set out to achieve - and people continued to smoke.

RELATED: New Reep study shows purpose of tobacco ban is being defeated - Yusuf Abramjee

This new survey focuses on what brands people are smoking in South Africa since the ban on cigarettes since the end of March.

Refilwe Moloto talks to Reep's Professor Corné van Walbeek about the survey findings.

We have asked people what brands they are smoking. We have a suspicion they are typically non-traditional brands.

Professor Corné van Walbeek, Director - Reep

Traditional brands are those produced by British American Tabacco (BAT), Japan Tabacco and Phillip Morris, he explains.

The non-traditional brands are the local brands that are being produced by local producers within South Africa.

Professor Corné van Walbeek, Director - Reep

He says the second survey Reep conducted indicated a significant shift in the market share of the two different groups of companies.

Before lockdown, the multinationals, the traditional brands had more than 75% market share of our survey respondents, and during lockdown particularly by June, their market share had decreased to less than 20% - which means some other brands have taken up the slack.

Professor Corné van Walbeek, Director - Reep

Even before lockdown, there was a price differential between the multinational brands and local ones with the latter being cheaper.

Prices during lockdown have skyrocketed by on average, 250%, he adds.

The price increases of the local brands have been significantly higher than 250% because the base was low...so the local companies seem to be making a killing during the lockdown period.

Professor Corné van Walbeek, Director - Reep

Local brands have increased not only market share, but also the unit costs.

Listen to the interview below:

This article first appeared on CapeTalk : 'Traditional cigarette brands drop from 75% share to under 20% during lockdown'



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