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South Africa's largest tobacco manufacturer, British American Tobacco SA (BATSA), says falling cigarette sales mean it may have to cut another 200 jobs at its local operations.
Since 2020, the company has retrenched more than 30% of its workforce, equating to around 500 positions.
It has now entered into retrenchment negotiations with a further 200 staff members.
BATSA - whose brands include Dunhill, Peter Stuyvesant, Rothmans and Pall Mall - says this is due to a 40% decline in its cigarette sales since the start of the pandemic.
It has long argued that ban on the sale of cigarettes during South Africa's pandemic lockdown led to a boom in illegal sales. The tobacco producer believes that the illicit market now accounts for 70% of South Africa's total cigarette market.
The ban, which was fiercely contested by SA's tobacco industry, was instituted by the government in a bid to lessen the impact of Covid-19 on SA's hospitals. It was later found to be unconstitutional.
"This illegal trade has severely impacted the sustainability of the legal tobacco industry and is a source of funds for criminal organisations in South Africa," it said.
BATSA applauded recent efforts by the South African Revenue Service (SARS) and law enforcement agencies to clamp down on the illicit cigarette market, but said that a minimum retail price is now required to stamp out black-market sales.
READ | Tobacco wars: Proposed R22 for a pack of smokes a 'laughable' attempt to dodge taxes, says BATSA
BATSA previously proposed that a pack of cigarettes retail at a minimum of R28. Taxes, including excise duties and VAT, come to around R20 to R22 a pack.