Business

BAT factory closure puts up to 35,000 South African jobs at risk

Published

3 hours ago

January 20, 2026

Chiraag

BAT factory Heidelberg, illicit cigarette trade South Africa, tobacco industry jobs, Gauteng manufacturing, Business Leadership South Africa, Joburg ETC

A factory shutdown with far-reaching consequences

When British American Tobacco confirmed it would close its only cigarette manufacturing plant in South Africa, the news landed with a heavy thud in Heidelberg and far beyond. The factory, based in Gauteng, is set to shut its doors by the end of 2026, marking the end of BAT’s local production after decades in the country.

While the immediate figure of 230 factory jobs has dominated headlines, business leaders warn that the real damage may be far deeper. According to Business Leadership South Africa, the closure could ultimately threaten up to 35,000 livelihoods tied to the tobacco value chain.

Why BAT is walking away

BAT South Africa has been blunt about its reasons. The company says it has reached the limit of what it can do to compete against the illicit cigarette trade, which now accounts for roughly three-quarters of all cigarette sales in the country. Cheap illegal cigarettes, often sold openly and without consequence, have steadily undercut legitimate producers and retailers.

For BAT, the economics no longer make sense. Closing the Heidelberg facility is framed as a last resort rather than a strategic reshuffle.

The ripple effect beyond Heidelberg

Business Leadership South Africa chief executive Busisiwe Mavuso has described the closure as a warning sign for the wider economy. In her view, the loss of factory jobs is only the first domino to fall.

Around 100 tobacco farmers across Limpopo, North West, and Mpumalanga depend on the legal cigarette market. Last year alone, these farms produced more than seven million kilograms of tobacco. From there, the chain extends to transporters, distributors, informal traders, and small retailers who rely on legitimate supply. When one major anchor like BAT exits local production, the shockwaves spread quickly.

A bigger problem than tobacco

Mavuso has been clear that this is not just a tobacco story. She points to the illicit economy as a growing threat across multiple sectors, from alcohol and pharmaceuticals to clothing and textiles. What is happening to BAT, she argues, could just as easily happen elsewhere if enforcement continues to lag.

To push back, Business Leadership South Africa has joined the Illicit Economy Task Force under the Consumer Goods Council. The group aims to improve product authentication, raise public awareness about the risks of illegal goods, and work more closely with SARS, the police, and the National Prosecuting Authority to unblock enforcement failures.

Public reaction and growing frustration

On social media, the response has been a mix of anger and weary resignation. Many South Africans say the rise of illegal cigarettes has been obvious for years, with products sold at traffic lights and tuck shops at prices legal manufacturers cannot match. Others fear the closure signals another blow to formal jobs at a time when unemployment is already painfully high.

There is also frustration that warnings from businesses have been repeated for years, yet action still feels slow.

What happens next

Mavuso has stressed that business cannot fix this alone. She has called for urgent government intervention, including dedicated resources for SARS illicit trade units, specialised investigators and better technology to track supply chains.

Whether those calls lead to real change remains to be seen. What is clear is that the planned BAT factory closure has become more than a single company decision. It has turned into a symbol of how unchecked illicit trade can quietly hollow out entire industries.