Johannesburg – British American Tobacco South Africa (BATSA) has announced the imminent closure of its manufacturing plant in Heidelberg, Gauteng, putting hundreds of jobs at risk.
BATSA announced on Thursday, 15 January 2026, that it will shut its factory in Heidelberg, Gauteng, after years of plummeting sales caused by the illicit cigarette market, which now accounts for an estimated three out of every four cigarettes sold in the country.
The cease in production by one of the country’s largest tax contributors puts around 230 jobs at risk and threatens the livelihoods of employees’ families and their wider communities.
BATSA, which has been in South Africa for more than 50 years, said its factory was operating well below its capacity, leading to the decision to shut up shop by the end of the year.
BATSA Head of Corporate & Regulatory Affairs Sub-Saharan Africa, Johnny Moloto, said: “With approximately 75% of the South African cigarette market now estimated to be illicit, continued local manufacturing has become unviable”.
However, Moloto said the company remains committed to the South African market and will transition from a local manufacturing model to an import-based supply chain to continue serving adult consumers in the market.
Commenting on the matter, Tax Justice SA (TJSA) said the closure of the manufacturing plant was the predictable outcome of allowing organised criminal networks to operate openly while enforcement agencies fail to act decisively.
“This shows what happens when you fail to tackle illicit trade: legitimate businesses are compromised, honest jobs are destroyed, and vital tax revenue is lost,” said TJSA leader Yusuf Abramjee.
“When criminals are allowed to operate openly and at scale, investment leaves, jobs disappear, and the rule of law begins to collapse.”
Abramjee said the lucrative illicit cigarette trade, which blossomed during the years of State Capture, was turbo-charged by the five-month tobacco ban imposed during the Covid-19 epidemic.
“Criminal operators capitalised on that unworkable and unconstitutional prohibition by using their illicit networks to sell cigarettes at massively inflated prices, and they have maintained their control of the market ever since,” explained Abramjee.
“Tax-evading cigarettes now account for an estimated 75% of all sales, depriving the fiscus of almost R30 billion in excise annually – vital revenue that should be spent on education, housing, and security.
“This factory closure shows that misguided regulation, endemic corruption, and enforcement failure have real economic consequences, not abstract ones.”
Abramjee said the closure of the BATSA plant in Heidelberg should now serve as a deafening alarm siren for authorities to put their house in order.
“Every year of inaction strengthens organised crime and weakens the state’s authority. Without decisive action against illicit trade, South Africa will continue to lose revenue, credibility, and control,” Abramjee said.
“A country where criminal networks outcompete law-abiding businesses is sliding towards a gangster state.
“This downward spiral cannot be tolerated for a single day longer.”
