The SA subsidiary of Japan Tobacco International (JTI) has pushed back against the government’s plans to introduce strict new tobacco laws, arguing it will lead to job losses, impede investment and fuel the illicit trade.
The tobacco industry is lobbying parliament to amend the draft Tobacco Products and Electronic Delivery Systems Control Bill, and has consistently argued that the state should enforce current legislation properly before it introduces new rules.
On Friday, JTI SA added its voice to the industry argument that the state should crack down on the illicit trade before imposing additional restrictions that would only make the problem worse.
“SA is facing an escalating crisis in the form of illicit trade, which has eroded government tax revenue at a very alarming rate. The unchecked growth not only undermines public health goals but also represents a huge drain on the national fiscus, crippling the state’s ability to fund essential services,” JTI SA corporate affairs and communications director Monako Dibetle told MPs on Friday.
JTI SA’s products, which include Camel and Winston cigarettes, were not part of the illicit trade, said Dibetle, citing a recent Ipsos study commissioned by rival British American Tobacco.
Illicit cigarettes are sold by manufacturers that do not pay excise tax to the SA Revenue Service, allowing them to undercut the prices set by tax-compliant companies.
Trade in illicit cigarettes was a long-standing problem, but it surged during the tobacco bans imposed by the government in response to the Covid-19 pandemic, said Dibetle.
The illicit trade accounted for 36% of the market in 2019, but shot up to 60% in 2020 (the first year of the Covid-19 pandemic), and then to 78% in 2025. The estimated losses in excise tax rose from R13.4bn in 2019 to R21.3bn in 2020 and R28bn in 2025, he said, comparing the losses to the size of various government department budgets. For example, this year’s estimated excise tax loss from illicit cigarettes was more than the department of agriculture’s R29.bn budget, he said.
JTI SA, which sells only cigarettes in SA, proposed introducing a minimum sales price above the tax threshold to curb illicit sales. Its parent company JTI, in which the Japanese finance ministry holds a 33% stake, sells both cigarettes and new generation products that heat tobacco instead of burning it.
The bill proposes regulating nicotine-containing products such as vapes in exactly the same way as tobacco products, with tough new measures that include a complete ban on smoking in indoor public places and the introduction of plain packaging with graphic health warnings.
The bill’s provisions also prohibit the sale of single cigarettes, ban point-of-sale advertising and vending machines, and give the minister of health the power to publish regulations restricting flavours.
Dibetle said a blanket ban on smoking in enclosed public places that now offer designated smoking areas would cause severe harm to the hospitality industry, as it would discourage smokers from going to restaurants, bars and entertainment venues. It would impede investment, and lead to heavy job losses, he said.
Similar arguments were made by the tobacco industry before the government introduced laws that from 2001 required indoor public places to set aside designated smoking areas of no more than 25% of their floor space.
But two studies by UCT researchers found that the overall impact on revenue and profitability was not severe, with some restaurants (mainly independent ones) negatively affected, while others (mainly chains) were positively affected.
Correction: July 29 2025
A previous version of this story put the illicit trade at 26% in 2019 and the Japanese finance ministry’s share of JTI at 30%; the illicit trade was 36% in 2019 and the Japanese finance ministry held 33% of JTI.
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