Tobacco producers cry out, as smuggled cigarettes hit 30 percent of total market

Operators in the tobacco manufacturing sector have expressed concerns that smuggling of cigarette products into the Zambian market is overshadowing the positive growth in the tobacco industry.

For instance, British American Tobacco (BAT) Chairperson, Roseta Chabala, claimed last week that it was estimated that smuggled cigarettes is approximately 30 percent of the total market.

Chabala said this presented a significant challenge to the legal industry in relation to sustainable growth.

She stated that this also deprived the government of significant revenue that was essential in transforming the economy.

“The positive impact of the growing Zambian economy for our industry is overshadowed by the scourge of illicit trade in tax-evaded cigarette products in the Zambian market.

“We encourage all relevant stakeholders to take decisive and bold steps in addressing the illicit trade in tax-evaded cigarettes,” she said in the 2022 annual report and financial statements released recently.

On operating environment, Chabala said the Zambian economy had recorded noted improvements over the years.

Chabala explained that this had resulted in enhanced macro-economic stability, pointing out that inflation reduced and that Zambia witnessed improvements in the exchange rate.

“This performance coupled with renewed commitment to implementing fiscal discipline resulted and enhanced investor confidence, a development that has laid the foundation for new and continued investments in Zambia,” she said.

On the 2023 outlook, Chabala said the fiscal deficit was likely to decrease this year.

“These market conditions, coupled with a predictable stable, and sustainable regulatory environment and excise structure for cigarettes, present opportunities for the continued growth of our business over the next few years,” she said.

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