MPs red-flag tobacco smuggling, surrogates

MEMBERS of Parliament yesterday expressed concern over increased incidents of smuggling that have hit the tobacco sector, where surrogates are flooding the industry. This was after the Justice Wadyajena (pictured)led Parliamentary Portfolio Committee on Agriculture visited the Tobacco Industry and Marketing Board (TIMB) auction floors, where MPs pointed out that contractors were prejudicing farmers and the country of billions of dollars worth of revenue through smuggling activities.

MPs raised concern that tobacco from Zimbabwe was being sold cheaply to surrogates who in turn sell the product to South Africa, which is one of the biggest exporters of cigarettes but does not produce tobacco.

Mt Darwin North MP Noveti Muponora said TIMB could be involved in smuggling and externalisation rackets as it was not doing anything to stop the vice.

“I am alleging that the TIMB is presiding over a bunch of cartels because of your blindness on value addition. The tobacco is bought here at US$2,50 and goes to South Africa where they just remove a simple part then start selling there at US$10,50,” Muponora said.

Mt Darwin West MP Barnwell Seremwe called for the revival of auction floors and fair pricing.

“There is a seal at auction floors of US$4,99, so auction floors are critical and surrogates must go. Exporters are giving third parties money and the cost for the third party is passed on to the farmer. We now have more surrogates than farmers,” Seremwe said.

Wadyajena said the contractors were prejudicing the farmers. “We hear of cases of people having their school fees and other things paid by the contractor. What we want at the end of the day is for the farmer to benefit and not the contractor. A contractor is at the end of the day a businessman who invests for a return. They are ripping off farmers and are not investing and that is a bit unfair,” he said. Wadyajena also alleged that there were cigarettemaking companies that were taking tobacco from Zimbabwe to South Africa.

“Why are cigarettes sold cheap in

South Africa when they are manufactured in Zimbabwe?” quizzed Wadyajena.

The committee asked TIMB to avail information on Zimbabwean companies that have processing plants in South Africa, which the MPs suspected could be the reason why South Africa is an exporter of the product and yet it does not produce the golden leaf.

MPs alleged that TIMB could be part of the smuggling rackets in the tobacco industry.

TIMB chief executive officer Meanwell Gudu said he could not respond to the smuggling allegations as the issue was under the purview of the Industry ministry, which deals with issues of finished products such as cigarettes.

Gudu was then ordered by MPs to provide information on Zimbabwean tobacco companies operating in South Africa today (Wednesday).