BAT takes a battering from black market trade

A British American Tobacco vehicle was robbed in Northpine earlier this month.

A series of northern suburbs robberies involving cigarette delivery vans comes against the backdrop of a recently released research paper that shows a thriving illicit tobacco trade in the Western Cape.

On Wednesday April 6, a British American Tobacco (BAT) was robbed in Northpine, just nine days after 12 men in three Quantum taxis robbed another BAT vehicle on Gertrude Street in Kuils River.

On Monday April 11, five robbers held up a BAT van with cigarettes in Eerste River before kidnapping and dropping the driver off on Bobs Way.

BAT confirmed all three robberies.

Johnny Moloto, general manager of BAT South Africa, said criminal syndicates had targeted their operations for years, but the trend had spiked with the lifting of the ban on cigarette sales in August 2020. BAT South Africa had been the target of 56 armed robberies in the first quarter of 2022 – a 50% increase compared to the same period the year before, he said.

“In 2021, BATSA was hit by armed robbers 114 times in total, the majority of which took place within the Western Cape. All incidences were reported to and managed by SAPS and the relevant authorities.”

He would not disclose how much, in total, the company had lost from the robberies, but the Gertrude Street robbery last month, saw 10 boxes of cigarettes stolen, each worth about R15 000, according to the police.

“BAT does not disclose the financial impact of this theft for commercial reasons. Needless to say, the very high number of robberies and hijackings does result in substantial losses,” said Mr Moloto.

He said the company urged SAPS to act immediately against the criminals, “whose actions are not only putting our staff and operations at risk but are also costing the economy dearly at a time when South Africa needs every cent it can get to support legitimate businesses”.

On how the company had been affected by the cigarettes black market, he said: “The continually growing illicit trade in South Africa is one of the biggest threats to our business, and this trade grew exponentially as a result of the government’s sales ban on tobacco products during the Covid-19 lockdown.

“We estimate that the fiscus has lost R19 billion due to the illicit trade of tobacco products. The legitimate industry has not only lost market share and revenue to the illegal market but also lost employment capacity across the value chain.”

BAT commissioned Ipsos, a market-research company, to look into the magnitude of the illicit trade.

“The latest report shows that a single pack of 20 cigarettes is now on sale for as little as R7 in many retail outlets nationwide,” Mr Moloto said. “This is less than a third of the minimum collectable tax of R22.79, and down even further from R8, which was the lowest price found in the previous study in October 2021.”

Furthermore, he said, 80% of stores in the Western Cape sold cigarettes below R22.79 per pack, as did almost 70% of outlets in Gauteng.