19 April 2018

Rwanda: Manufacturer Blames Cigarettes Shortage on Tax Stamps

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

Weeks after their cigarettes begun to completely disappear from local shops, bar and mall shelves, British American Tobacco (BAT); the manufacturers of Intore, Dunhill Switch and Dunhill Lights brands have blamed the shortage on tax stamps.

Weeks after their cigarettes begun to completely disappear from local shops, bar and mall shelves, British American Tobacco (BAT); the manufacturers of Intore, Dunhill Switch and Dunhill Lights brands have blamed the shortage on tax stamps.

By press time, these brands, which are the three most popular in the country were nowhere in any of the biggest retail stores - Simba Supermarket, Nakumatt and Ndoli's Joint chain of supermarkets.

At the 514 Bar and Restaurant at Kisimenti, a pack of Intore cost Rfw2000, a price that is double what ordinarily costs. Dunhill, if available, goes for Rfw4,000 which is also double from the usual Rfw2000.

In Kisimenti area a survey we did found that only one retail store on a building known as Kwa Mutsindashyaka, has BAT cigarettes, with Intore going for Rwf2,000 and Rfw5,000 for any of the Dunhill brands.

In Kimironko, most consumers of the BAT brands have been left with no option but to enter the market and buy Intore at Rwf2,000. Hardly any shop or bar has cigarettes and the only one that had Dunhill Lights was selling a packet at Rwf6000; four times its usual retail price.

Within the shops and bars within Remera-Giporoso's hotspot, commonly known as 'Corridor', Dunhill which originally sold at Rfw1,500 was .going for between Rfw4000-Rwf6000.

Dunhill Switch was nowhere to be found in all the areas we visited.

Addressing the shortage

In an email to The New Times, BAT Kenya's Simukai Munjanganja - Head of Legal and External Affairs (East and Central Africa) shot down speculations of decreased production or hoarding of product due to prospective price increase.

He however said that there were challenges in the company's supply chain.

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.

"We regret that there has been a shortage of our products namely Intore, Dunhill switch and Dunhill lights over the last two weeks occasioned by challenges in our supply chain logistics.

"The shortages in the market are neither due to decreased production nor prospective price increase. It 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," he said.

Munjanganja added that BAT was working closely with Rwanda Revenue Authority (RRA) and say they will have solved the issue by theweekend 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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