BL Premium reports that the SA arm of cigarette maker British American Tobacco (BAT-SA) says it will be adding to the tally of local job losses as illicit tobacco traders continue to gain market share at its expense.
The company said on Friday it had entered into consultations as it needed to cut 300 jobs in the country because of the failure of the authorities to curb illicit cigarette sales. Illegal cigarettes accounted for 42% of sales in the informal market by November 2018, from 33% earlier in the year, the Tobacco Institute of Southern Africa said at the time. An Ipsos study published in 2018 found an illicit brand had become the top-selling cigarette product in SA. "Following a 30% decline in our business since 2012, it is unavoidable that we now adjust the size and structure of our business," Johnny Moloto, BAT-SA’s head of external affairs advised. He commented that finance minister Tito Mboweni’s recent pledge to tackle the illegal market "is encouraging", as was the re-establishment of an illicit economy unit at the SA Revenue Service (Sars). But Moloto went on to comment: “The size of the illegal trade [Sars is] trying to tackle, however, remains massive and will require an escalating and sustained effort to have a meaningful impact, recover tax revenues and prevent further job losses." Nonetheless, recent actions by Sars had "saved some jobs and minimised redundancies" at BAT-SA.
- Read the full original of Nick Hedley’s report on this story at BusinessLive (paywall access only)
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