British American Tobacco South Africa (BATSA) has announced it will shut down its only domestic cigarette manufacturing facility, bringing an end to local production by the end of 2026. The company cited the rapid growth of the illicit cigarette market as the primary factor behind the decision.
BATSA, the producer of popular brands including Dunhill and Peter Stuyvesant, explained that illegal trade has significantly undermined the legal market, making continued local manufacturing unsustainable. The company emphasized that the move is part of a broader strategy to adapt to market realities and focus on other operational efficiencies.
Industry analysts note that South Africa’s illicit cigarette market has been expanding in recent years, fueled by smuggling and counterfeit production, which has eroded revenues for legal manufacturers and limited tax contributions to the government. BATSA’s closure highlights the scale of the challenge and may prompt increased policy focus on enforcement and regulatory measures.
The company said it remains committed to its workforce and will work to manage the transition responsibly, including consultations with employees and relevant stakeholders. While domestic production will cease, BATSA intends to continue supplying the South African market through imports and regional operations.
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