Factory Closure Intensifies Calls for Stronger Controls on South African Tobacco Market

The recent announcement by British American Tobacco South Africa (BATSA) that it will close its Heidelberg cigarette manufacturing plant has added new urgency to the country’s debate over illicit trade and excise enforcement. The closure, which threatens hundreds of jobs and removes a significant piece of South Africa’s formal tobacco manufacturing capacity, has prompted trade unions to enter the discussion more forcefully, arguing that stronger technological enforcement measures are needed to restore order to the market.

The South African Federation of Trade Unions (SAFTU) has now publicly backed a tougher enforcement approach, linking the factory closure directly to what it describes as the country’s rapidly expanding illicit cigarette market. According to estimates frequently cited in South Africa’s policy debate, illicit products account for at least 60% of cigarette sales in the country – one of the largest illicit market shares anywhere in the world.

Against this backdrop, SAFTU has welcomed the ‘five-point plan’ proposed by South African Revenue Service (SARS) Commissioner Edward Kieswetter to address the illicit economy, while simultaneously calling for the rapid introduction of real-time production monitoring systems in the tobacco and alcohol sectors.