October 2026: BAT to Exit South African Manufacturing as Illicit Cigarettes Take 75% Market Share
British American Tobacco (BAT) is bringing down the curtain on over 50 years of cigarette manufacturing in South Africa, sticking to its plan announced in January to close its Heidelberg factory by the end of the year. The company will transition entirely to an import model, unpersuaded that government efforts to curb illicit trade have been effective.
BAT states that approximately three out of every four cigarettes (75%) sold in South Africa are now illicit. Legal manufacturers face severe pricing pressure as illicit cigarettes are sold at prices far below levels compliant with tax regulations. The rampant illicit tobacco trade is estimated to cost the South African fiscus R28 billion (US$1.7 billion) a year in lost revenue. To bridge the price gap between legal and illegal products, BAT previously called for an urgent mandatory minimum retail price of R38 (US$2.3) per pack of 20 cigarettes – the threshold it deems economically viable – as well as a reduction in current tobacco excise frameworks.
The Heidelberg plant, which was historically BAT’s eighth-largest manufacturing facility globally and exported products across the region, is currently operating at a utilization rate of just 35% of its total capacity. Operating at such low utilization has rendered local production unsustainable. BAT maintains that it would consider reinvesting in domestic manufacturing should the government achieve a substantial and sustained reduction in the illicit trade.
July 2026: Survey Highlights Low Awareness of Nicotine Alternatives Amid South Africa’s Tobacco Law Revision
A recent consumer survey commissioned by Philip Morris International (PMI) has provided new insights into consumer dynamics within the South African tobacco market, highlighting significant gaps in public awareness regarding alternative nicotine options. The survey points to low levels of familiarity with newer, non-combustible alternatives. According to the data, nearly 44% of adult smokers surveyed are unfamiliar with e-cigarettes, 65% are unfamiliar with heated tobacco products, and 70% remain unfamiliar with nicotine pouches.
The study also reports that eight in ten South African smokers surveyed express support for a risk-based regulatory framework, under which alternative nicotine products would be regulated differently from traditional combustible cigarettes. Respondents noted that factors such as retail availability, affordability, and access to accurate risk-reduction information would play a significant role in their potential transition away from smoking – a shift that carries weight in a country with close to 10 million smokers.
The market discussion comes at a critical juncture for domestic policy, coinciding with a landmark revision of national tobacco laws under the Tobacco Products and Electronic Delivery Systems Control Bill. As the legislative process moves forward, onlookers and market stakeholders are closely watching whether these new alternative products will receive differentiated regulatory treatment based on their specific health risk profiles.
July 2026: South Africa’s Landmark Tobacco Bill Moves Forward with Focus on Risk Differentiation
South Africa’s Parliamentary Portfolio Committee on Health has voted 10 to 1 to advance the Tobacco Products and Electronic Delivery Systems Control Bill, signaling a significant shift toward an evidence-led legislative approach. The core objective shaping the revised legislation is the recognition of risk differentiation between different nicotine products. Rather than treating all products identically, the framework draws a distinct line between combustible cigarettes, which produce smoke and drive tobacco-related diseases, and non-combustible alternatives like vapes and heated tobacco products, which scientific evidence shows to be less harmful.
While the policy embraces harm reduction in alignment with global tobacco treaty frameworks, it establishes strict limits. The upcoming regulations intend to maximize protections for children against all forms of nicotine exposure. Additionally, the legislation seeks to introduce severe penalties to target South Africa’s expansive illegal cigarette trade, while simultaneously shielding traditional small traders from disproportionate rules that could threaten their livelihoods.
The Bill reached its current stage following an extensive public consultation process, which included visits to 27 municipalities across all nine provinces and drew roughly 40,000 written submissions alongside thousands of in-person and online testimonies from citizens, medical professionals, and traditional leaders. Committee leadership emphasized that the recent vote represents a mandate to refine and improve the legislation rather than an outright endorsement of the current text. With the initial hurdle cleared, the Bill now moves into its next phase: comprehensive, line-by-line deliberations to fine-tune the regulatory text before it can be finalized and enacted into law.
September 2025: Philip Morris International Launches VEEV Vapes
Philip Morris International (PMI) added VEEV vapes to its portfolio of smoke-free products in South Africa in September 2025. With this launch, South Africa becomes one of the 20 countries where PMI offers a complete trio of IQOS heated tobacco, ZYN nicotine pouch and VEEV vape products.
PMI states that the smoke-free product range is designed not only to reduce exposure to harmful chemicals found in the smoke of cigarettes, but also to fit seamlessly into modern lifestyles.
– Heated tobacco (IQOS): Leading the heated tobacco products category is the IQOS ILUMA, PMI’s most advanced device, which emits on average 95% lower levels of harmful chemicals compared with cigarettes.
– Nicotine pouches (ZYN): The world’s leading nicotine pouch brand, tobacco-free ZYN is now offered in 37 countries worldwide and continues to expand rapidly. Available in a variety of nicotine strengths and flavors, it offers convenient nicotine enjoyment with no disturbance to the consumer’s lifestyle.
– Vapes (VEEV): VEEV NOW disposable vape and VEEV ONE rechargable vape offer a vaping experience backed by science with the ingredients used in VEEV e-liquids strictly controlled and devices constructed with 80% recyclable components.
