BAT South Africa to shut cigarette plant as illicit trade squeezes legal market

By Nqobile Dludla

JOHANNESBURG, Jan 15 (Reuters) - British American Tobacco South Africa (BATSA) will close its only local manufacturing facility and end domestic production by the end of 2026 due to the devastating impact of the fast‑growing illicit cigarette market, the company said on Thursday.

The maker of Dunhill and Peter Stuyvesant cigarettes said in a statement that the planned closure threatens approximately 230 jobs.

Located in Heidelberg, in the Gauteng province, the facility currently operates at just 35% of total capacity due to severe volume losses, directly attributable to the exponential growth of the illicit tobacco trade in South Africa, the unit of British American Tobacco BATS.L said.

"With approximately 75% of the South African cigarette market now estimated to be illicit, continued local manufacturing has become unviable," said Johnny Moloto, Head of Corporate and Regulatory Affairs at BAT Sub-Saharan Africa.