Illicit cigarette trade linked to 200 job losses in BATSA

Mapaballo Borotho

A report has revealed how the illicit cigarette trade has flourished in South Africa. Credit: Pixabay

The closure of BATSA’s Heidelberg plant by the end of 2026, which will cost more than 200 jobs, has been linked to the dominance of illicit cigarettes in South Africa.
Critics say the government’s failure to combat organised crime has made local manufacturing economically unviable, with illicit products accounting for about 75% of the market.
Political parties and tax justice groups warn that weak enforcement is destroying legitimate businesses, jobs and tax revenue, with similar risks emerging in the alcohol industry.

The South African government has come under fire for its failure to curb the illicit cigarette trade in the country.

The illicit tobacco trade has been identified as one of the contributing factors to the closure of British American Tobacco South Africa’s (BATSA) manufacturing plant.

The plant, which operates in Heidelberg, Gauteng, will end local production by the end of 2026, costing more than 200 people their jobs.

According to BATSA, with an estimated 75% of the South African cigarette market now illicit, continued local manufacturing has become economically unviable.

ActionSA says this is a direct consequence of the government’s failure to combat the illicit tobacco trade.

“ActionSA warns that the same trajectory is emerging in the legal alcohol industry, where one in five alcoholic drinks sold in South Africa is now estimated to be illicit,” the party said in a statement.

Meanwhile, the Tax Justice South Africa Foundation says the closure of BATSA is the predictable outcome of allowing organised criminal networks to operate openly while enforcement agencies fail to act decisively.

“This shows what happens when you fail to tackle illicit trade: legitimate businesses are compromised, honest jobs are destroyed, and vital tax revenue is lost,” said TJSA leader Yusuf Abramjee.

“When criminals are allowed to operate openly and at scale, investment leaves, jobs disappear, and the rule of law begins to collapse.”

The illicit cigarette trade, which blossomed during the years of State Capture, was turbo-charged by the five-month tobacco ban imposed during the Covid-19 epidemic.

Criminal operators capitalised on the unworkable and unconstitutional prohibition by using their illicit networks to sell cigarettes at massively inflated prices, and they have maintained their control of the market ever since.

Tax-evading cigarettes now account for an estimated 75% of all sales.