BATSA says the boom in illegal cigarette sales ‘forced’ it to consider further job cuts.
South Africa’s largest tobacco maker, British American Tobacco SA (BATSA), says falling cigarette sales mean it will have to cut another 200 jobs at its local operations.
Since 2020, the company has laid off more than 30% of its workforce, which is equivalent to about 500 positions.
He has now entered cut talks with another 200 staff members.
BATSA, whose brands include Dunhill, Peter Stuyvesant, Rothmans and Pall Mall, says this is due to a 40% decline in its cigarette sales since the start of the pandemic.
He has long argued that the ban on cigarette sales during South Africa’s pandemic lockdown caused a boom in illegal sales. The tobacco producer believes that the illicit market now accounts for 70% of the total South African cigarette market.
The ban, which was fiercely contested by the SA tobacco industry, was instituted by the government in an attempt to lessen the impact of Covid-19 on SA hospitals. It was later found to be unconstitutional.
“This illegal trade has severely impacted the sustainability of the legal tobacco industry and is a source of funds for criminal organizations in South Africa,” he said.
BATSA applauded recent efforts by the South African Revenue Service (SARS) and law enforcement agencies to clamp down on the illicit cigarette market, but said a minimum retail price is now required to crack down on sales in the black market.
READ | Tobacco wars: Proposed R22 for a pack of cigarettes is a ‘laughable’ attempt to evade taxes, says BATSA
BATSA previously proposed that a pack of cigarettes be retailed at a minimum of R28. Taxes including excise and VAT come to around R20 to R22 per package.
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