THE cigarette industry in South Africa is increasingly becoming a dog-eat-dog business as smaller manufacturers fight tobacco giants on price for market share.Small local manufacturers have been entering the market with cigarettes selling at super-low prices of about R7 to R16 a pack. The newcomers have been welcomed by many in a country with high levels of poverty and unemployment.Big tobacco companies, however, make the point that manufacturers have to pay excise and VAT of R12.45 on every pack of cigarettes, in line with the law.“If you take into account manufacturing and distribution costs, it means that anyone selling a packet for less than R15.50 cannot be playing on a level playing field,” said British American Tobacco director Kingsley Weaton on a recent trip to South Africa.This suggests that many of the independent local manufacturers duck taxes.But that is not true, according to Belinda Walter, chairwoman of the fair-trade independent tobacco association. It represents si...
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