via Mnangagwa defends alleged smugglers – The Zimbabwean 24 March 2015
Government has stepped in to protect Savanna Tobacco, which has been accused of smuggling cigarettes into South Africa and starving Zimbabwe of millions of dollars in potential revenue.
Savanna is owned by President Robert Mugabe’s in-law, Adam Molai, who is married to his niece Sandra Mugabe. The company has denied the smuggling allegations, saying they stemmed from international rivals, among them BAT. They accused BAT of seeking to undermine their business.
Mugabe’s senior co-vice president, Emmerson Mnangagwa, has declared that he would personally ensure that Savanna was protected from what he called international mafia accused of sabotaging it. His position could indicate that Molai has convinced him and government that international business saboteurs are out to kill Savanna.
Mnangagwa said he had ordered a probe into what he referred to as industrial espionage that was costing the country millions of dollars in lost tobacco export revenue. He made the remarks when he toured the Savanna factory in Harare last Friday. It could not be immediately established what motivated the tour.
The VP said BAT and some South African tobacco companies were conniving with customs officials and private investigators and spying on the local industry. The plot, he said, involved the “bigger boys” framing Savanna as an illegal exporter of cigarettes, resulting in the forfeiture of its products.
“Because the allegations are there, they ought to be investigated,” he said. “We would want our people to interrogate these allegations to make sure we remove them, if they are there. Industrial espionage must be dealt with because it has constrained our own growth and by doing so, it also denies revenue to our fiscus,” Mnangagwa said.
“I think we need to protect our own industries. I am told the tobacco industry in Zimbabwe is not growing as much as we would wish it to grow because of the bigger boys who would want to make sure that upcoming business people in this industry are constrained to expand,” added Mnangagwa.
BAT has denied being involved in commercial espionage. Cabinet has set a target of 10 billion stacks of cigarettes for exportation under the ZimAsset economic blueprint.
Speaking during the tour, Molai said: “We have allowed a scenario where foreigners come and dictate the pace of our own development, sending their own officials, intelligence to make sure we do not grow as an industry.” He claimed said Savanna lost R150 million to organised hijackings of cigarette consignments in 2011, while other local companies such as Breco (trading as Fodya [Private] Limited), Tadnet and Cutrag suffered the same fate.
However, reports indicate that Molai has used his political links to evade taxation at the border and more than $50 million worth of cigarettes from Savanna have been seized from the company in the past in South Africa.
According to the reports, the cigarettes are smuggled using various means, among them hiding them in trucks and through illegal crossing points.
The Zimbabwean recently carried a story that indicated that Savanna brand cigarettes, particularly Pacific Blue, were a hit in several parts of South Africa for their low prices.
According to research commissioned by the Tobacco Institute of South Africa, which is predominantly funded by BAT, 9.5billion illegal cigarettes with a street value of about R4-billion were smoked locally in 2012..
Independent research says Savanna has captured almost 10 percent of the illegal cigarettes black market in South Africa that is worth some R4 billion. Pacific’s illegal cigarettes are sold mostly on the streets of Cape Town.
In October 2013, 1.6million Pacific cigarettes were found hidden on a train in Plumtree and Pacific cigarettes were during the same year seized at the Beitbridge border post near Musina and in Boksburg, South Africa, hidden in secret compartments and behind electronic goods.
Smuggled Pacific cigarettes have also been found in Zambia, Mozambique and Namibia.