The illicit trade of tobacco products is destroying the legal tobacco value chain, putting jobs and the livelihoods of emerging and commercial farmers at risk.
This was the message at the Jeppes Reef Farmer’s Day event in Nelspruit, hosted by the Limpopo Tobacco Processors (LTP), the South African tobacco agro-processors in South Africa. Tobacco volumes have been on the decline since 2012, when the total output was 13.5 million tonnes, as compared to 2016, when only 11.3 million tonnes was produced – a drop of more than 2 million tonnes.
Industry under siege
“Our industry is under siege, both from illicit traders who not only sell cheap cigarettes but also procure leaf outside our borders,” says Christo van Staden, Managing Director at the Limpopo Tobacco Processors (LTP). “Proposed extreme regulation amendments of plain packaging and retail display restrictions for all tobacco products will also put further strain on the local tobacco farming sector,” he said.
LTP’s largest client is British American Tobacco South Africa (BATSA), which procures over 85% of all the tobacco leaf grown in the country.
BATSA’s Head of External Affairs Joe Heshu says the growth of the illicit tobacco trade, which constitutes 47% of the total tobacco market, makes it one of the largest in the world and represents a clear and direct danger to the legal industry.
“It will be very difficult to justify further investments in tobacco production in South Africa while volumes are in decline, thanks to the illicit trade. Also under threat is the BATSA Emerging Farmer’s Programme, which was aimed at transforming the tobacco farming sector. Last year BATSA, in partnership with LTP, Mobile Agri Skills Development and Training (MASDT), and Lowveld Agricultural Services, expanded the programme to two more provinces – from 33 to 155 farmers”, said Joe Heshu. – Press release