R8.1m cigarette seizure and ethanol raid highlight scale of South Africa’s illicit trade

Law enforcement operations across South Africa have targeted the illicit cigarette trade and a suspected ethanol storage facility, resulting in multiple arrests and seizures worth millions.

What happened

According to IOL, police and other law enforcement agencies have seized more than R8.1 million worth of illicit cigarettes and arrested nine suspects in intelligence-driven operations across the country in recent weeks.

Ethanol storage facility raided in Gauteng

According to IOL, the Hawks’ Serious Commercial Crime Investigation unit, based at its Pretoria headquarters, and the South African Revenue Service (SARS) raided premises in Kempton Park identified as a storage facility for imported ethanol.

According to IOL, investigators allegedly found imported ethanol being off‑loaded into 1,000‑litre flow bins at an unlicensed and unregistered facility, and additional flow bins and storage tanks were also found on the premises. No arrests have been made and the investigation is continuing, IOL reports.

Recent cigarette seizures and arrests

According to IOL, law enforcement carried out several separate operations that yielded large consignments of illegal cigarettes and arrests:

• In Boshof, three suspects were arrested and police confiscated 339 boxes and more than 15,000 packets of illicit cigarettes worth R3.6 million.
• In Mpumalanga, two suspects were arrested after police, together with SARS Customs, seized illicit cigarettes worth about R2 million during operations in Nelspruit and White River.
• In the Free State town of Wepener, two suspects were arrested after police confiscated illicit cigarettes worth R500,000; the pair are also facing bribery charges, IOL reports.
• In Klerksdorp, North West, two suspects were arrested after police intercepted a truck carrying illicit cigarettes worth more than R2 million.

Economic and industry impact reported

IOL reports government and industry warnings that the illicit economy is costing the fiscus billions in lost revenue, undermining legitimate businesses, distorting competition and threatening jobs.

According to IOL, the Institute for Security Studies (ISS) said revenue from illicit activities has contributed to high‑level corruption, political party funding, and other criminal endeavours.

IOL also reports examples of industry consequences: in January, British American Tobacco South Africa (BATSA) announced it would close its Heidelberg manufacturing facility by the end of 2026 and warned the closure, together with its broader value chain, places about 35,000 jobs at risk.

According to IOL, the Consumer Goods Council of South Africa (CGCSA) estimates the illicit economy drains as much as R100 billion in state revenue annually, and that it has established Illicit Economy Task Forces with more than 20 industry associations to press for stronger government action.

IOL cites the Transnational Alliance to Combat Illicit Trade (TRACIT), whose 2025 review found South Africa remains vulnerable to illicit activity across multiple sectors and said these illegal markets “undermine legitimate businesses, erode public revenues, distort trade flows, and deepen inequality.”

Authorities respond

According to IOL, SARS said it is supporting the National Illicit Economy Disruption Programme and is working to disrupt and dismantle the illicit economy, organised corruption, and fraud linked to customs and tax processes.

IOL reports SARS warned that such crimes damage and displace legitimate economic activity and that economic growth, job creation and prosperity for South Africans are at stake.

Legal thresholds noted

IOL notes that cigarettes that retail for under R24 are illegal because no tax has been paid on them, and that a 750ml bottle of spirits should cost more than R100.

What remains unclear

Investigations into the ethanol storage facility in Kempton Park are continuing and, according to IOL, no arrests have been made in that matter so far.

Reporting based on IOL.