Errant tobacco firms blacklisted
THREE tobacco contacting companies have been denied the chance to resume operations by the Tobacco Industry and Marketing Board (TIMB) after failing to comply with marketing regulations as the industry regulator maintains a tough stance on rogue companies.
TIMB in June this year suspended the operations of eight companies due to the nonremittance of stop order deductions.
The suspended contractors were Voedsel, Agritrade, Chevron, Munakiri, Bindura Leaf, Mbaluk, Huruyadzo and Sub Sahara.
The suspension came after the industry regulator introduced new regulations for contract tobacco farming to safeguard the integrity of the contract system to ensure that tobacco growers are not shortchanged. At the same time, contractors will be guaranteed their returns.
This was amid a realisation that some contractors were underfunding farmers and overcharging for inputs while some growers were side-marketing the contracted crop.
Recently there were audios circulating on social media where some farmers were registering their displeasure around the conduct of Voedsel Tobacco. The farmers claim that the company has been owing them huge sums of money from the tobacco sold last season.
TIMB spokesperson Chelesani Moyo, without mentioning the names of those denied to operate, confirmed to the Independent that a number of companies were pardoned after complying with the law, while others were denied the right to operate.
“Five contracting companies were pardoned after complying with the law and three have been denied to operate.
“Currently contracting companies are in the process of getting their licences for the 2023/2024 season and the list is yet to be released as the deadline for application is October 31. If the three stated above manage to comply they may be pardoned as well,” Moyo said.
In the past, the regulator suspended the companies; Munakiri Leaf Tobacco, Vision Leaf and Mbaluk Leaf for buying tonnage above the maximum allowable in terms of the contract.
However, analysts argue that effective enforcement is critical in curbing indiscipline in the tobacco sector.
At the beginning of the tobacco marketing season, the government gazetted regulations to punish players who violate marketing rules. Contractors and contracted growers involved in side-marketing are now liable to compensate three times the loss suffered by any affected tobacco merchant.Merchants are also supposed to adhere to minimum funding requirements.
The move to suspend errant merchants is being regarded as a positive action by the TIMB while blacklisting growers found engaging in side-marketing would improve investor confidence, reduce risk and ensure better prices for growers.
Tobacco contributes about 10% to the gross domestic product (GDP) and is one of the top export commodities.
Government plans to increase tobacco production to 300 million kg and encourage investment in value addition and beneficiation.
As part of efforts to bring sanity to the sector, all contractors are now required to submit to TIMB a complete schedule of inputs and their costs and failure to do so will lead to suspension for that season.
Contractors should submit copies of legally binding contracts by September 30 of every year and proof of inputs distributed by either paid-up invoices or payment plans with suppliers.
All contracted growers without accompanying signed contracts will be de-contracted. In addition, TIMB requires contractors to submit a list of all contracted growers including their contact details by November 30.