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The South African Tobacco Industry Updated Report Available
BY Juliet Gebbie
South Africa
10 November 2015
R 2 040.00 (ZAR)  
estimated $ 132.03 (USD) *
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The South African Tobacco Industry


This report focuses on the South African tobacco industry, which is valued at R29bn and contributes more than R12bn in excise duty and VAT per annum. Although there are still an estimated 186 commercial tobacco farmers in South Africa, both the area under tobacco cultivation and tobacco production have dropped markedly since the turn of the century. The substantial decline in domestic production of tobacco has led to rising imports of leaf tobacco and South Africa is now one of the biggest buyers of Zimbabwean leaf.


Increasing Pressures on the sector


The local industry is finding itself under increasing pressure. One of the key issues facing the sector is tightening legislation with regard to smoking. South Africa’s most recent proposed regulatory changes include plain packaging requirements as introduced in Australia in 2012. In addition, the South African government is keen to adopt further control measures before the World Conference on Tobacco or Health to be held in South Africa in 2018. Added to legislative pressures is the illegal trafficking of cigarettes. Locally illicit trading is estimated to account for 23% of the tobacco market and has cost the country more than R21bn in revenue since 2010. The hijacking of vehicles transporting legal tobacco products is also becoming an issue of increasing concern, with British American Tobacco South Africa announcing that approximately 1,400 of its trucks are hijacked every year.


Report Coverage


The report on the South African tobacco industry describes the current market and developments in the e-cigarette sector and focuses on factors influencing the success of the industry. The report profiles ten companies, including the dominant British American Tobacco, which manufactures 27 billion cigarettes per annum for the domestic and international markets and has a local market share of approximately 85%. Also profiled is local company, Carnilinx (Pty) Ltd t/a CTC, which manufactures a number of less expensive brands, and Philip Morris South Africa (Pty) Ltd, importer of well-known brands, Chesterfield and Marlboro.


Page
1. INTRODUCTION 1
2. DESCRIPTION OF THE INDUSTRY 1
2.1. Industry Value Chain 2
2.2. Geographic Position 3
3. SIZE OF THE INDUSTRY 4
4. STATE OF THE INDUSTRY 8
4.1. Local 8
4.1.1. Corporate Actions 10
4.1.2. Regulations 11
4.1.3. Enterprise Development and Social Economic Development 12
4.2. Continental 12
4.3. International 13
5. INFLUENCING FACTORS 15
5.1. Economic Environment 15
5.2. Health Concerns 15
5.3. Proposals to Ban the Growing of Tobacco 16
5.4. Illicit Trafficking 16
5.5. Regulations 17
5.6. Technology 18
5.7. Research and Development (R&D) 19
5.8. Innovation 19
5.9. Labour Resources 20
5.10. Environmental Concerns 22
6. COMPETITION 23
7. SWOT ANALYSIS 24
8. OUTLOOK 24
9. INDUSTRY ASSOCIATIONS 25
10. REFERENCES 25
10.1. Publications, Podcasts and Youtube 25
10.2. Websites 26
COMPANY PROFILES 27
AMALGAMATED TOBACCO MANUFACTURING (PTY) LTD 27
BRITISH AMERICAN TOBACCO SOUTH AFRICA (PTY) LTD 29
CARNILINX (PTY) LTD 32
GOLD LEAF TOBACCO CORPORATION (PTY) LTD 34
JT INTERNATIONAL SOUTH AFRICA (PTY) LTD 36
LEONARD DINGLER (PTY) LTD 38
OTP DISTRIBUTORS (PTY) LTD 40
PHILIP MORRIS SOUTH AFRICA (PTY) LTD 42
UNIVERSAL LEAF SOUTH AFRICA (PTY) LTD 44
VAN ERKOMS TABAKKE (PTY) LTD 46