British American Tobacco South Africa (BATSA) wants the government to set a compulsory minimum retail price of R38 for a pack of cigarettes. The company said the illegal tobacco trade costs South Africa about R30 billion a year in lost excise revenue.
BATSA said a clear price floor would help enforcement agencies spot cigarettes that are suspiciously cheap. It said this would also make the illegal trade less profitable.
“These results show that while the President has recognised the threat of the illicit tobacco trade and signalled government’s intention to address it, illicit manufacturers continue to operate with impunity, openly selling their brands for less than the taxes due on every pack,” said Johnny Moloto, BATSA’s head of corporate and regulatory affairs for Sub-Saharan Africa.
Moloto was speaking about research by Ipsos that BATSA cited. The research found brands priced below the minimum collectable tax of R27.12 per pack in about 75% of surveyed outlets.
Packs selling for less than R20 were found in almost 65% of the outlets, according to the research. BATSA said the findings point to wide failure to pay tobacco taxes.
A low price on its own does not prove that a pack is illegal or that its taxes were not paid, IOL reported. Further checks would still be needed to show whether duties had been paid.
A separate study by Econometrix and Oxford Economics estimated that South Africa lost R31.4 billion in direct tax revenue in 2024. That included about R25.7 billion in unpaid excise duties and R5.3 billion in unpaid VAT.
The same study estimated that illegal products made up roughly 66% of all factory-made cigarettes smoked in the country.
Moloto said police currently struggle to tell which products are illegal. “At the moment, several different pieces of legislation need to be read together to identify illicit products, requiring SAPS to bring in specialists from other areas of government simply to determine whether a product is illicit,” he said.
The South African Revenue Service has backed minimum unit pricing as a possible tool in the past. On 23 October 2025, SARS told Parliament’s Portfolio Committee on Health that such a measure could discourage sales below a set price.
SARS said at the time that it could also disrupt the economics of the illegal market and make it less profitable.
BATSA also wants manufacturing licences taken away from companies that are repeatedly found to under-declare production or dodge taxes.
Earlier in 2026, BATSA closed its South African factory. The company blamed the growth of illegal cigarette sales for that decision.
The company’s own anti-illicit trade work has faced questions before. Former SARS investigator Johann van Loggerenberg looked at claims involving tobacco companies, including BATSA, in his book Tobacco Wars.
In a statement on 13 September 2021, BATSA rejected those claims. “We emphatically reject the mischaracterisation of our conduct by some media outlets,” the company said.
BATSA said its activities were meant to help law enforcement fight illegal tobacco. It said the UK’s Serious Fraud Office closed an investigation without bringing charges.
Source: this article is based on reporting by IOL. Image: IOL. Written with the help of AI and published by the Tzaneen Voice Business desk. See our Editorial Standards.
Anelisa Nkuna covers business and money news for Tzaneen Voice. Anelisa reports on the rand, fuel prices, interest rates, jobs, Eskom, Transnet, farming and company results. The aim is simple: explain what the numbers mean for household budgets, small businesses and workers in South Africa.