Illegal cigs killing industry

TOBACCO farming in South Africa is being threatened by the rise in distribution and selling of illicit cigarettes.

South Africa has lost around 2 million tons in production since 2012 as a result. Chief executive of Limpopo Tobacco Processors (LTP) Christo van Staden said they had been affected by a drought in 2015 and now were faced with a new problem.

“We’ve emerged from the devastating drought of 2015, and yields are improving, but we face an even greater threat in the form of the illicit trade, which robs the legal industry of income and puts all the jobs and livelihoods in the tobacco value chain at risk.”

Limpopo is the country’s largest tobacco-producing region.

LTP chairperson Rudolf Otterman said tobacco production in 2012 stood at 13.5 million tons, while just 11.3 million tons was produced in 2016.

British American Tobacco (BAT) South Africa said that if you were paying around R16.30 per packet of 20 it was likely that you purchased illicit cigarettes.

BAT head of external affairs Joe Heshu said there were severe implications for the economy and employment, particularly in the agricultural sector.

“It is not just the annual turnover in processed tobacco of more than R600 million a year that is under threat, it is the job security of everyone in the value chain, including farmworkers and commercial farmers, small-scale farmers in our highly successful Emerging Farmers Initiative, people employed by tobacco processors and at our production facility in Heidelberg and distribution and retail staff, not to mention the indirect jobs.”

An economic impact assessment showed the economy-wide impact of BAT alone contributed more than R18 billion to South Africa’s gross domestic product in 2015.