Illegal trade ‘rampant’

Zimbabwe is in the grip of a ‘rampant’ illegal trade in cigarettes that is becoming a challenge to local cigarette companies and the economy in general, according to a story in The Herald quoting tobacco-industry sources.
The story said that illicit cigarettes were being sold on the streets for half to a third of the normal retail price, prejudicing sales in conventional shops and the country’s tax revenue.
The MD of the local arm of British American Tobacco, Clara Mlambo, said the tobacco sector was suffering from the effects of foreign currency shortages and low disposable incomes, on top of those created by the illegal trade in cigarettes.
The Herald reported that illicit cigarettes were usually sold at 50 cents a pack while the officially-gazetted average price in conventional retail outlets was $1.50.
“We have seen some products from other companies but not our brands,” said Mlambo. “They are sold so cheap on the streets, which means the consumers will buy those due to pressure on their wallets.”
Mlambo said there was a need for increased enforcement by revenue authorities to curb the challenge of the illegal trade, which was posing a threat to the licit tobacco sector.
Nevertheless, she said that BAT was optimistic about its prospects and encouraged by government initiatives aimed at improving the business environment and attracting investment into the country.