SATTA’s Illicit Trade Fight Comes After Farmers Collapsed

South Africa’s legal tobacco alliance says only 10 black farmers remain, down from 125, while illicit cigarettes hold most of the market. The South Africa Tobacco Transformation Alliance (SATTA) wants the state to treat those sales as organised crime. The growers it was formed to protect have already left the land.

Zachariah Motsumi, SATTA’s spokesperson, put that collapse in an April 4, 2024 statement, while SARS commissioner Edward Kieswetter called illicit tobacco “the biggest fight we face now.” British American Tobacco South Africa (BATSA), a SATTA member, later said it will halt its only local cigarette plant, in Heidelberg, by the end of 2026.

The Alliance Still Counts 10 Black Farmers

SATTA has, since its 2019 formation, stronger action against criminal networks that smuggle, make and sell illicit product. Motsumi’s 2024 statement still used the same farmer arithmetic the alliance has carried for years. The Black Tobacco Farmers Association founded SATTA, he said, and then watched a wholesale exit as legal leaf demand shrank.

There were 125 black tobacco farmers when SATTA was formed. Motsumi said only 10 remained at the time of that statement, down 92%. Commercial growers, he said, had fallen from 197 in 2019 to fewer than 155, a 21% drop on SATTA’s pairing. Limpopo Tobacco Processors, the alliance’s processing affiliate, had already told farmers to cut new planting and had shortened the working week to two days in some areas.

There were 125 black tobacco farmers when SATTA was formed; today, there are only 10, down 92%.

Zachariah Motsumi, SATTA spokesperson, April 4, 2024 statement

The statement also tied factory cuts to the same squeeze. BATSA had already cut 584 jobs from a workforce of 1,800, Motsumi said, mainly because it sold 40% fewer cigarettes than in 2020. About 500 jobs were then at risk in third-party logistics firms that move legal product. Smoking had not fallen in line with those legal volumes. Legal sales had.

WHAT SATTA WANTS FROM THE STATE

• More seizures: Take illicit product off the streets and keep pressure on the trucks that move it.
• Jail terms: Prosecute the people who make, distribute and sell untaxed cigarettes, not only the street seller.
• Community tips: Ask residents to identify local dealers so police and SARS are not working blind.
• National priority: Make the tobacco casework a standing enforcement goal rather than a one-off raid.

Shadrack Sibisi, then SATTA chairman, used the 2019 launch of the farmer-manufacturer alliance to put black growers, processors and BATSA on the same stage. The 2024 numbers show how little of that grower base is left to stand on.

How Large Is South Africa’s Illicit Cigarette Market?

University of Cape Town researchers put the illicit share at 5% in 2009, 60% in 2021 and 58% in 2022, and they estimated R119 billion in lost cigarette tax from 2002 to 2022 in 2022 prices. That is the academic record SATTA cited. It is also lower than the 75% BATSA used when it announced the Heidelberg halt.

Nicole Vellios and Corné van Walbeek, at UCT’s Research Unit on the Economics of Excisable Products, used gap analysis between survey consumption and tax-paid volumes. They found the illicit market was small until 2009, then climbed. After allowing for smokers who would have cut back if prices had been higher, they put 2022 losses at R15 billion in excise and R3 billion in VAT. Most of the twenty-year damage sat in 2010 to 2022, at R110 billion in 2022 prices.

UCT’S ILLICIT SHARE RECORD

A later UCT paper, using 2021 Global Adult Tobacco Survey data, again put the illicit share at about 60% that year. Van Walbeek has said his working guestimate stayed “in the order of about 60%.” He also said the problem was already about 30% by 2018, and that the 2020 sales ban accelerated it rather than creating it from nothing.

SATTA said it agreed with Kieswetter that illicit product accounted for 60% to 70% of cigarette sales. BATSA, in January 2026, used a higher in-house figure of about 75% to explain why local making no longer paid. Those are different estimates from different years, not one blended rate.

British American Tobacco Cut the Leaf Contracts First

The farmer collapse did not wait for Heidelberg. BATSA ran an Emerging Farmer Initiative from 2011 to train black growers, supply inputs and buy leaf. Johnny Moloto, then speaking for BATSA, said the scheme later “became commercially unsustainable” after the 2020 ban and the illicit surge, and that the company moved remaining participants toward vegetables.

Rabelani Mamagwa, who farmed in Mianzwi outside Thohoyandou, said the cutoff arrived in January 2021 with almost no runway. BATSA would collect some of that harvest, she was told, and then tobacco farming had to stop. Three wooden drying barns with sun-yellowed, tattered plastic still stood outside her house after the leaf work ended. The crop that replaced it was cabbage.

That January they said they would collect some of our harvest one last time, but then all tobacco farming must stop.

Rabelani Mamagwa, former tobacco farmer, Mianzwi

Lucky Ramabulana, another former grower on the scheme, said BATSA needed the farmers while illicit trade scared it, then failed to be straight with them. Moloto said the 2022 vegetable programme still supported 79 farmers on 98 hectares. Ramabulana said that help was not enough for people who still had tobacco in the ground when the offtake ended, and that some went into debt to finish the season.

Van Walbeek has said that putting black tobacco farmers into a transformation pitch can make the public sympathetic to the legal industry. SATTA’s own headcount is the blunt version of that tension. The alliance still speaks in the farmers’ name. Most of the 125 are gone.

LEGAL TOBACCO HEADCOUNT

Motsumi, citing Oxford Economics, said the legal industry supported 35,991 fewer jobs by 2022, a 22.4% drop. That is the paid workforce around factories, leaf and distribution, not the 10 names still on the black-farmer list.

Heidelberg Will Go Quiet by Year End

On January 15, 2026, BATSA said it will shut the Heidelberg plant, its only South African cigarette factory, by the end of 2026. Moloto, speaking as BAT Sub-Saharan Africa corporate and regulatory affairs head, said local manufacturing had become unviable with about 75% of the market estimated as illicit. The plant, which has run since 1975, was operating at 35% of capacity because legal sales had collapsed.

With approximately 75 percent of the South African cigarette market now estimated to be illicit, continued local manufacturing has become unviable.

Johnny Moloto, BAT Sub-Saharan Africa corporate and regulatory affairs head, January 2026

The closure puts about 230 plant jobs at risk and will hit suppliers and contractors around Lesedi. BATSA said it will switch to imports and may put money back into local making if illicit trade is brought under control. Motsumi’s 2024 warning about factory and logistics cuts was the earlier chapter of the same retreat.

THE HEIDELBERG PLANT IN FIGURES

• Opened: The factory has been making cigarettes since 1975.
• Capacity use: BATSA said the line was running at 35% when it announced the halt.
• Jobs on site: About 230 posts sit at risk as production ends.
• Company market call: BATSA put the illicit share at about 75% in January 2026.

Francois van der Merwe, a director at Limpopo Tobacco Processors, called the BATSA decision a funeral for a leaf trade built around that factory since the early 1900s. Legal makers still need leaf. They need much less of it when most packs sold never pass through a tax-paid plant.

Most Untaxed Packs Come From Licensed Plants

SATTA’s mafia language points at smugglers, ghost exports and politically connected operators. The same statement thanks SARS for moves against companies such as Gold Leaf and cheers a Supreme Court of Appeal ruling that let SARS evidence into the trial of Walter and Letisha Cyril. The couple, former directors of CEW Logistics and Tish Maritime, face 164 counts of tax fraud in an alleged R120 million scheme. Prosecutors say cigarettes imported from Zimbabwe were booked as Mozambique cargo and sold in South Africa with no duty or VAT.

That is the cross-border story. Motsumi, citing Ipsos, has also said more than 80% of illicit cigarettes are made by local manufacturers already registered and licensed by SARS, with about 20% smuggled, mainly from Zimbabwe. Cheap local brands keep turning up in police seizures. The immigrant-smuggler account is louder in public argument than SATTA’s own factory-share citation.

UCT’s 2021 survey work found BAT’s share down to about 33%, from more than 90% in the early 2000s. Researchers named Polaris Manufacturing, formerly Gold Leaf Tobacco Corporation, as a major player now rivalling BAT. In that telling, the legal giant did not only lose volume to trucks at the border. It lost the price ladder inside the country.

THE LEGAL MARKET’S LONG SHRINK

1. 2009: UCT puts illicit trade at 5% of the cigarette market.
2. 2019: SATTA launches with 125 black tobacco farmers on the books.
3. 2020: Government imposes a five-month tobacco sales ban during Covid rules; courts later strike it down.
4. January 2021: BATSA ends tobacco offtake on its emerging-farmer scheme; UCT later records a 60% illicit peak that year.
5. April 4, 2024: Motsumi issues the mafia statement, with 10 black farmers left and 584 BATSA jobs already gone.
6. January 2026: BATSA says the Heidelberg plant will stop by the end of 2026.

Van Walbeek has stressed that SARS trouble in the 2010s, not only the ban, opened the gap. Street raids still pick up bakkie-loads and spaza stock. They do not, on their own, reverse a market in which most sticks already move outside the tax net.

Two-Day Weeks on the Processing Line

Leaf plants feel a legal-share crash before a cigarette factory announces a halt. SATTA said Limpopo Tobacco Processors ordered cutbacks in planting because demand for legal leaf had dropped, and that some processing shifts had already been cut to two days. Growers who still had a buyer sent bales through that system. Growers who did not switched to soybeans, sugar beans and cabbage, or stopped.

SATTA’s public test for a legal pack is price. On its site, a pack selling for less than R27.12 is treated as unlikely to have paid the minimum collectable tax. A legal pack, it says, should also carry the South African diamond stamp, the mandated health warnings, the quitline number and the tar and nicotine reading. Anything cheaper is the product the two-day week is losing to.

The excise duty on tobacco products is collected on the legal stick count, not on what people actually smoke. When UCT’s gap is this wide, processors cannot mill their way back to a five-day roster. They can only shrink to match the leaf the remaining tax-paid factories still want.

Kieswetter Called It the Biggest Fight

SATTA praised Kieswetter for naming illicit tobacco as the biggest fight SARS faces and for asking for more resources. The alliance wants confiscations, prosecutions and a political decision that there are “no more places for the politically connected tobacco mafias to hide.” It also wants communities to point out dealers. That is a tax-and-crime programme. It is not a programme that puts 115 growers back on tobacco land.

WHERE EXPERTS DISAGREE

• UCT REEP: Illicit share peaked at 60% in 2021 and was 58% in 2022, with R119 billion lost from 2002 to 2022 in 2022 prices.
• Kieswetter via SATTA: Illicit product accounts for 60% to 70% of cigarette sales, and the case is SARS’s biggest current fight.
• BATSA, January 2026: About 75% of the market is illicit, enough to make the Heidelberg line unviable at 35% capacity.

The barns in Mianzwi are still there, plastic torn, leaf work over. Heidelberg is due to go quiet by the end of 2026. SATTA is still counting 10 black farmers and asking the state to lock the rest of the trade down.