230 jobs at risk as illicit cigarettes devastate the market

By Boitumelo Tshehle

Head of Corporate and Regulatory Affairs at BAT Sub-Saharan Africa, Johnny Moloto.

British American Tobacco (BAT) South Africa  has announced it will cease local cigarette manufacturing and close its Heidelberg facility by the end of 2026, citing the devastating impact of the illegal tobacco trade on legal sales.

The move marks the end of local production for the multinational, which has operated in South Africa for decades, and puts approximately 230 jobs in the Lesedi Municipality at risk.

BAT South Africa said the decision is driven by the dramatic expansion of the illicit cigarette market, which now accounts for roughly 75% of the total market.

“With continued illicit trade, local manufacturing is no longer sustainable,” said Johnny Moloto, Head of Corporate and Regulatory Affairs at BAT Sub-Saharan Africa.

“This is an incredibly difficult day for our employees and their families, many of whom have dedicated years of service to the company.”

Currently operating at just 35% of capacity, the Heidelberg plant has been severely affected by volume losses linked to illegal trade. BAT South Africa stressed, however, that it remains committed to the South African market and will continue supplying legal products through an import-based model.

BAT South Africa  has spent the past ten years engaging with government and law enforcement authorities to address illicit trade, warning that policy missteps and weak enforcement threaten legitimate manufacturers.

The company specifically cited the 2020 Tobacco Sales Ban, which it described as unconstitutional, and successive above-inflation excise increases that widened the price gap between legal and illegal cigarettes. BAT South Africa also warned that proposed tobacco legislation currently before Parliament could worsen the problem.

“While some in government have genuinely tried to help, the overall response hasn’t been enough to protect legitimate businesses and the jobs they create,” Moloto said.

He said only a coordinated, whole-of-government response can meaningfully curb illicit trade.

The plant closure will affect about 230 employees directly, with broader implications for the local economy in Heidelberg and surrounding areas. BAT South Africa said it is exploring support measures for affected staff but acknowledged the scale of the disruption.