The company warns a proposed ban on branded tobacco packaging poses a threat to British American Tobacco’s only cigarette plant in SA
British American Tobacco (BAT) says it may close SA’s only cigarette plant if plans to ban branded tobacco packaging are implemented.
BAT operates its eighth-largest factory in the world at Heidelberg, south of Johannesburg. The proposed new rules would threaten the financial viability of the operation, Joe Heshu, BAT’s head of external affairs in Southern Africa, said on Monday.
Plain packaging threatened the closure of the factory and “poses a threat to the viability of the legal tobacco industry in SA”, Heshu said. The move would make it harder to distinguish the cigarettes from black-market cigarettes and “the illegal market will benefit from having a cheaper product”, he said.
SA is cracking down on industries and products viewed as harmful to consumers, including through a planned tax on sugar-sweetened beverages, which Finance Minister Pravin Gordhan said in February would be implemented later in 2017.
SA had drafted a bill mandating plain cigarette packaging, which was expected to be made available for public comment soon, Elize Joubert, CEO of the Cancer Association of SA, said on Friday.
“You don’t want to build jobs based on people who are sick,” said Joe Maila, a spokesman for the Department of Health. He declined to provide a time frame for the new rules.
Plain packaging of tobacco products, which has been championed globally by the World Health Organisation, requires standardised designs on cigarette packs.
BAT had cut 750 jobs in SA in two years as it grappled with an increase in illegal cigarettes, it said. The Heidelberg plant employs 1,100 people.
According to the Tobacco Institute of Southern Africa, the supply, distribution and sale of smuggled or counterfeit tobacco products have cost the government more than R21bn since 2010 in lost tax revenue.