BAT: Tobacco prices to go up in March

Johannesburg - Smokers will feel the impact of the 2013 Budget on cigarette prices next month, British American Tobacco (BAT) SA said on Wednesday.

"This increase is announced in a context of already high tobacco taxes and where the company remains seriously concerned with the proliferation of cheap illegal cigarettes... due to illegal operators avoiding these very same taxes," said BAT regulatory affairs head Leslie Rance.

Earlier, Finance Minister Pravin Gordhan announced that the tax on cigarettes would increase by 60c to R10.92 per packet of 20.

This meant the recommended retail price for BAT SA's biggest selling brand, Peter Stuyvesant, would increase by R1 to R28,50.

The new pricing would be in effect for orders from March 4.

The company was worried about the increasing prevalence of the illegal cigarette trade, as independent industry research suggested these cigarettes accounted for 30% of the South African cigarette trade.

"While we remain encouraged by government's response to the problem of illegal cigarettes, the reality is that illicit trade is on the increase and we are expectant of further supportive actions to drive down this growing trend...," Rance said.