19 April 2018

Rwanda: Cigarette Prices to Return to Normal Next Week

Photo: Daily Monitor
Harmful. Despite the existence of the Anti-smoking Law, many people continue smoking cigarettes in public (file photo).

Prices of cigarettes in Rwanda have doubled following a shortage in supply on the local market that lasted two weeks.

According to the manufacturer, British American Tobacco (BAT); that supplies popular brands including Intore, Dunhill Switch and Dunhill Lights, the shortage was due to tax stamps.

In an email to The New Times, BAT Kenya's Simukai Munjanganja - Head of Legal and External Affairs (East and Central Africa) explained the shortage.

"It (shortage) was due to delay in supply of tax stamps. The law requires a pack of cigarettes to be affixed with tax stamp, hence we could not deliver the cigarettes for sale until the tax stamps were affixed," Munjanganja said.

He further dismissed speculations that the shortage was a result of decreased production or hoarding of the product with a goal of fetching better prices on the market.

"The shortages in the market are neither due to decreased production nor prospective price increase," he said, adding "We regret that there has been a shortage of our product occasioned by challenges in our supply chain logistics."

In 2006, an operational restructuring exercise saw BAT Kenya take over the manufacturing of the cigarettes and only left BAT Rwanda to handle the distribution and marketing for the Rwanda-Burundi area.

A spot check across stores and supermarkets around the city discovered that there cigarette shelves were empty. And for popular hangout joints, a pack of Intore was at Rfw2000 up from Rwf 1,000, Dunhill, if available, was going for Rfw4,000 - Rwf 6,000 up from the usual Rfw 1,500.

Addressing the shortage

Munjanganja told The New Times that BAT was working closely with Rwanda Revenue Authority (RRA) and say they will have solved the issue by the weekend and clarified that prices of their products remain the same as they have always been.

"We have worked in partnership with Rwanda Revenue Authority (RRA) to resolve this issue and we expect to resume normal supply by Saturday, 21st April 2018. We would like to assure our customers that BAT Rwanda Limited has not changed the prices," he said.

In an interview with The New Times, the acting Deputy Commissioner in Charge of Customs at RRA; Alex Mugire said that his institution was not officially aware of any currents shortage, adding that any shortage has nothing to do with customs.

"Regarding the current shortage, it is not a customs issue in Rwanda and the East African Community region. However, overall, cigarette imports have been going down over time," he said.

Asked whether the shortage had the potential of affecting tax returns, Mugire admitted that it was too early to tell.

BAT has a primary listing on the London Stock Exchange and has a secondary listing on the Johannesburg Stock Exchange, the Nairobi Securities Exchange and the Zimbabwe Stock Exchange.

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