Why is British American Tobacco closing its factory in South Africa?

BAT is closing its South African factory because the illicit cigarette market has grown to 75%, making local manufacturing unviable due to severe volume loss.

What percentage of South Africa's cigarette market is illicit?

Approximately 75% of the South African cigarette market is estimated to be illicit.

How many employees will be affected by BAT's South Africa factory closure?

Around 230 staff members at BAT's South Africa factory in Gauteng will be affected by the closure.

Home / Business and Economy / BAT Closes SA Factory Amidst 75% Illicit Market

BAT Closes SA Factory Amidst 75% Illicit Market

16 Jan

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Summary

South Africa's cigarette market is now 75% illicit.
British American Tobacco is closing its only factory.
Operations became unviable due to severe volume loss.

BAT Closes SA Factory Amidst 75% Illicit Market

British American Tobacco Plc is shuttering its sole cigarette manufacturing facility in South Africa by the end of 2026 due to the pervasive issue of illicit trade. The company stated that local production has become unviable as approximately 75% of the South African cigarette market is now estimated to be illicit, leading to severe volume loss at the factory.

The Gauteng-based factory, established in 1975 and BAT's eighth largest globally, is currently operating at just 35% of its total capacity. The closure will impact approximately 230 employees, whose futures will be determined through a consultation process. This move underscores the significant challenges faced by tobacco companies in combating illegal markets.