After half a century of production, British American Tobacco (BAT) will stop making cigarettes in South Africa by the end of this year, blaming policy failures and the illicit market for making legal manufacturing economically impossible.

British American Tobacco South Africa (Batsa) announced on Thursday, 15 January that it would lose its Heidelberg manufacturing facility in Gauteng and cease local production of factory-manufactured cigarettes by the end of 2026.

The decision brings the curtain down on a facility that has been operating in the Heidelberg community since 1975. Batsa said the closure threatens about 230 jobs in the Lesedi Municipality as it transitions to an import-based supply chain.

The company confirmed in a statement that a formal consultation process with workers and unions began on Thursday and is expected to reach a conclusion by the end of March 2026. While the decision to close the factory is final, the company said individual employment outcomes would be determined through that process.

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A market of illicit trade

Batsa has laid responsibility for the closure at the door of the illicit cigarette trade, which it estimates now accounts for around 75% of the South African market. As a result, the Heidelberg plant has been operating at just 35% of its production capacity.

"This is an incredibly difficult day for Batsa and for the approximately 230 employees and families who may be affected," said Johnny Moloto, head of Corporate and...