South Africa is getting its first national track-and-trace system for everyday goods, and the target is big. The Department of Trade, Industry and Competition (dtic) on Thursday published regulations covering tobacco, liquor, pharmaceuticals, food and appliances, Business Day reports. The system is due next year.
The number driving it comes from Sars: illegal trade costs the country about R100bn a year. Illicit cigarettes alone cost an estimated R18bn in lost excise in 2022. Research by Econometrix for the Consumer Goods Council puts the damage wider, at R193bn in displaced formal production and 87,500 direct jobs across 12 sectors.
How it is meant to work
Every unit a manufacturer or importer produces will need a machine-readable code, a digital "passport" linking the item to its origin and owner. Each code and its details, including origin, dates and importer, gets registered with the National Consumer Commission (NCC). That builds a national repository where a missing or invalid code should show up quickly.
The NCC will oversee that repository and can give controlled access to the police, Sars, the Border Management Authority, the Department of Health, the health products regulator Sahpra, and the National Regulator for Compulsory Specifications.
Minister Parks Tau's department points to the EU, where the system tracked more than 53 billion products across 810,000 businesses in its first two years.
The factory that didn't wait
The timing has an awkward backdrop. British American Tobacco's last South African cigarette factory, once its eighth largest in the world, closes at year-end. BAT says it will reinvest locally only if illicit trade falls substantially and stays down. Unconvinced that government has done enough, it is switching to imports.
That is the real verdict on years of promises. A big legal player has decided it is cheaper to make cigarettes elsewhere than to compete with untaxed packs here. Those jobs are going now. The track-and-trace system is coming next year.
Why the barcode is the easy part
South Africans have seen this film. A registration system is only as strong as the people who check it. Codes can be cloned, illegal factories can simply not register, and goods that never enter the formal system never show up as a "gap" in anyone's database.
Three questions will decide whether this works:
- Who scans at the till and the border? A repository nobody checks catches nobody. The regulations name agencies that may access the data. They do not, on what has been published so far, tell us how many inspectors will actually be checking shelves, trucks and spaza shops.
- What happens to the small legal producer? Coding every unit costs money. Big brands can absorb it. Small local food and liquor producers may struggle, and if compliance is too expensive, some will slip into the informal market the system is meant to shrink.
- Is Sars getting the capacity it needs? The R100bn figure is Sars's own. Its enforcement budget and staffing should be part of the same conversation.
The health angle matters more than the tax
It is easy to frame this as a revenue story. It is also a safety story. Sahpra has warned that illicit medicines are on the rise, with syndicates targeting weight-loss, painkiller and chronic medication. The liquor industry estimates about 20% of alcohol sold here is illicit. A fake chronic medicine is not a tax problem. It is a person who thinks they are treated and isn't.
If track and trace lets a pharmacist or a consumer check a code and know a box of pills is real, that alone justifies it.
The bottom line
The regulations are a real step, and the EU model shows tracking at scale can be done. But the gap in South Africa has never been the lack of a system. It has been the lack of enforcement behind the systems we already have. When the rules are gazetted, watch for the inspection numbers, the penalties and the Sars budget. That is where we will know whether this is a fix or another database.