Thursday 1 October 2020 – POLICE, tax officers and trade regulators should conduct a full investigation into the activities of the Gold Leaf Tobacco Corporation (GLTC) following its fallout with the Fair-Trade Independent Tobacco Association (FITA) , Tax Justice SA (TJSA) urges today.
A war of war words has broken out since FITA announced on Tuesday that it would no longer represent Zimbabwean-owned GLTC, which dominated South Africa’s illegal cigarette market during the lockdown sales ban.
TJSA founder Yusuf Abramjee says: “FITA’s largest remaining member is a self-confessed tobacco smuggler, so for GLTC to have fallen below FITA’s own questionable standards is a sure sign that authorities must step in.
“Gold Leaf’s domination of the illegal cigarette market exploded during the sales ban, when they accounted for one in every three cigarettes sold. They were illegally selling almost 30 million cigarettes a day, at hugely inflated prices, without paying a cent in tax.
“Since the ban was lifted, Gold Leaf has tried to maintain that hold on the market, using tactics that are simply organised crime.
“We call for a full investigation into all Gold Leaf’s activities to be undertaken by police, SARS and all other agencies who are meant to enforce the trading laws.”
According to independent research by the University of Cape Town’s Research Unit on the Economics of Excisable Products, GLTC brands accounted for 31.1% of the cigarettes sold during the lockdown sales ban.
GLTC brands (and their lockdown market share) include: RG (11.6%), Sharp (5.7%), Chicago (5.4%), Savannah (2.0%) and Voyager (1.1%), as well as Zimbabwean brand Remington Gold (5.3%).
Abramjee says: “Smuggling of GLTC’s Remington Gold from Zimbabwe was so successful it was one of SA’s top-six selling brands during the sales ban.
“No wonder Gold Leaf’s local FITA partners were so annoyed with them. But they should know that there’s no honour among thieves.
“This is not the first time, after all. An Ipsos study in 2018 revealed that Gold Leaf was a key player evading taxes in the illegal market and its brand RG was the top-selling illicit cigarette.”
TJSA revealed last month that GLTC has continued operating illegally since the lifting of the ban, by selling cigarettes through the internet in breach of the Tobacco Control Act. Also, GLTC prices suggest that they are not paying the legal minimum taxes.
On 14 September, FITA chairperson Sinenhlanhla Mnguni promised to investigate GLTC’s activities. No results of that investigation have yet been announced.