HARARE - There were reports last week that Savanna Tobacco was smuggling cigarettes into South Africa and that the company was making millions of dollars through the illegal trade.
The Daily News (DN) spoke to Savanna Tobacco (ST) over the issue.
DN: There have been accusations in the South African media that Savanna Tobacco is involved in the smuggling of cigarettes to South Africa. Please give us your comment on this.
ST: The accusations are patently false.
There is no iota of evidence by the media in question to back up this fictitious story.
One Stephen Botha, head of Forensic Security Services (FSS), telephoned Savanna’s general manager in South Africa at the beginning of December promising “revenge” for the arrest of two of his service providers in Zimbabwe for espionage.
Upon further investigation, FSS and Botha have been proven to be service providers for a major competitor of ours.
The same competitor also funds the study that was the basis for this article. The connection becomes clear.
Fortunately, the whole conversation with Botha was recorded.
After failing to achieve the arrests as had been threatened, the strategy has then turned into a smear campaign against Savanna Tobacco.
DN: Please give us a brief background to your tobacco business i.e. where you export and the quantities involved and what you produce for the local market?
ST: Savanna was established as an EPZ company, now ZIA, and is mandated to export 80 percent of its product.
We export into South Africa and Zambia where we have registered companies.
Our export products carry all legally-required revenue stamps and adhere to all applicable national laws.
Outside these, Savanna supplies third parties who then export and supply their various countries of origin.
Savanna produces approximately two billion cigarette sticks per annum, of which no more than 20 percent goes into the local market.
DN: We have been informed that the tobacco in question, specifically your Pacific product meant for the local market is being smuggled to South Africa and other countries in the region, what exactly is happening?
ST: Savanna Tobacco has only been in the cigarette manufacturing industry since 2004, while the issue of cigarette smuggling has been a global phenomenon for many decades now.
Madison and Everest are readily available in Zambia, Botswana and Mozambique.
DN: How did they get there?
And is BAT being held accountable? Particularly since it has a long history of being implicated in global cigarette smuggling.
ST: A quote from Kenneth Clarke, the former Chancellor of Britain, when he commented as vice chairman of BAT, after an investigation into BAT’s global practices.
“There is no evidence at all which I have ever seen to suggest that BAT is participating in this smuggling ... The idea that BAT was knowingly supplying that channel ... is nonsense ... You can buy smuggled (BAT cigarettes) on the streets of Colombia and other cities, but BAT have not put them there...
“We act, completely within the law, on the basis that our brands will be available... in the smuggled as well as the legitimate market.”
And he made a similar statement when he testified in Parliament.
The attempt to create an impression that cigarette smuggling is limited to the Pacific brand is wrong, and merely confirms a hidden agenda.
In addition, the article asserts that Pacific constitutes 10 percent of total smuggled cigarettes? Why not mention the other 90 percent?
DN: If there are some cartels buying cigarettes from you and smuggling them to South Africa, is there a way of eradicating this challenge?
ST: We are not aware of any smuggling cartel that exists.
However, there are cartels of another kind. The ones who control the industry, establish its rules, bar competitors, and destroy reputations to protect their wealth and monopolistic tendencies.
DN: Recently, there was a huge furore over the espionage saga in which your rivals, BAT were named. Is this smuggling issue related to the espionage scandal?
ST: The only saga worth talking about here is our purpose. Our purpose as a company is to ensure that every African smoker is able to access Zimbabwe’s finest cigarettes
- in hygienically sealed packs
- to suit every income level.
Our finest quality cigarettes must positively impact upon the well being of those within our distribution channels and the communities in which they operate, creating profitable partnerships, within a cleaner environment, for all involved.
How competitors react to this, whether through espionage, smear-campaigns, or threats, is immaterial.
A just cause will always win. South Africa would never allow any Zimbabwean company to operate with impunity setting up illegal communication base stations, and spying in contravention of national laws.
Why should Zimbabwe?
DN: Are you under any investigation from the South African Revenue Authority over the cigarette smuggling saga?
ST: We are not aware of any investigations by the SARS against our business in South Africa and in fact, beginning 2013 a full audit was conducted of all our imports into South Africa as well as the relevant clearances thereof and payment of the appropriate taxes and we received a clean bill of health from SARS.
DN: Accusations have been that President Robert Mugabe, who is a relative of the Savanna major shareholder, Adam Molai takes sides with your company in the tobacco industry “wars”.
Last year, he accused BAT of industrial espionage and hijacking your trucks. Is it true you are using the President’s name to fend off competition from BAT?
ST: At no stage has Savanna Tobacco, Adam Molai or any of its employees used the name of the president to achieve any commercial objectives, nor is there any benefit in doing so.
The president is a national leader, and addresses all issues of national importance, regardless of industry or personalities.
In point of fact, the president did not accuse BAT of any espionage and hijacking.
He merely stated that any companies using illegal or extra-legal methods in their dealings, such as those proven against BAT, would be liable for sanction.
DN: Pacific cigarettes were seized at the Plumtree border recently; please give details on what transpired and where the cigarettes were destined for?
ST: We confirm that 1 600 cases of Pacific cigarettes were found at the Plumtree border post.
However; we have no customer who purchased such a quantity.
Thus, it could have been a consolidation of several customers into one shipment.
Beyond this, we have no facts to explain this.
DN: There have been suggestions that you use Rollex Transport to smuggle cigarettes.
Do you have links to Rollex Transport and are they the ones you use for transportation?
ST: We have never used Rollex to transport our cigarettes. In fact, as a result of the hijackings of our cigarettes on the way to South Africa, we resorted to rail transport and have not used road transport in almost 18 months.
The allegations in the South Africa media were that Rollex transport, in South Africa, were transporting our cigarettes from the Johannesburg airport.
We have never used Rollex transport for our South African operation.
DN: Please briefly take us through the process you go through when exporting your cigarettes?
ST: Our export customers come through to our factory in Zimbabwe and load their cigarettes en route to their destination country.
We raise a CD1 form with our banks, as well as a bill of entry with Zimra to authorise the export.
We then receive our payment from the customers and release cigarettes to the customer.
Upon export, we then receive acquitted CD1s and bill of entries with stamps from Zimra to confirm that the goods have left Zimbabwe.
Thus, should any customers smuggle or be caught attempting to smuggle, culpability cannot be placed upon Savanna Tobacco.
This would be akin to making BP or Shell liable for any petrol bombings that happen in the world because they sold the petrol to the petrol bombers.
DN. Any other issue you may want to discuss?
ST: Since time immemorial the strategy in fighting people who fight for political and economic emancipation is to label them criminals.
President Mugabe was labelled a terrorist for decades, as was the late VP Nkomo, and the late Nelson Mandela was only removed from the USA terrorist list five years ago.
Tokyo Sexwale was recently detained in America for being on an apartheid-era terrorist watch-list that is still operational in the USA
In this case, we are being labelled smugglers for the same reasons.
These are archaic methods of attempting to instil fear in people who are driving a just cause.
Ours is a just cause and as Africans we not only have a right, but an obligation to create value from our raw materials, and benefit the continent.
We cannot have a situation where less than one percent of cigarettes supplied in Africa are made by indigenous African companies, while 99 percent are made by European and American monopolies.
This has to change, and only we can change it.
Otherwise, all achievements to economically free our continent will amount to nothing.