Home » Judicial » Govt to Probe ‘Cigarette Spying’ Row

Government has ordered an investigation into claims of industrial espionage by big players in the local tobacco sector as this was costing the country millions of dollars in potential revenue and stunting the growth of cigarette manufacturers, Vice President Emmerson Mnangagwa has said.

He said spying by the “bigger boys” in the industry was destroying value addition and beneficiation as espoused in the Government’s economic blueprint, Zim-Asset.

This comes in the wake of reports that rogue security agents are abetting multinational companies, British American Tobacco (BAT) and South African tobacco firms, in sabotaging local cigarette manufacturers in well-knit corporate espionage that allegedly involves Zimra officials.

The rogue elements, working in cahoots with local private investigation companies, reportedly get massive kick-backs to impound cigarettes bought by foreign buyers under a purported anti-illicit cigarette campaign.

As a result, the buyers were now shunning local cigarette manufacturers and opting for countries such as the United Arab Emirates.

Speaking after a tour of the Savanna Tobacco factory in Harare on Friday, VP Mnangagwa said Government would not allow foreign business people to exploit locals.

“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.”

He added: “This is happening, yet themselves (foreign companies) are using our tobacco outside there, creating jobs and revenue. We would want maximum benefits from products grown in our country.

“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.”

Accusations against BAT are not new as the company has been dragged to court in South Africa for abetting cigarette smuggling and was fined in Belgium last year after it was found guilty of espion- age.

VP Mnangagwa said exploitative players in the tobacco industry were killing competition and thwarting Government’s value addition and beneficiation agenda.

He said, Government should create a conducive environment for local cigarette manufacturers by probing allegations levelled against BAT, local security agents and Zimra officials.

“I think it is necessary for Government to come to their aid we are there to create a (conducive) environment for beneficiation and I have asked Mr (Adam) Molai (Savanna Tobacco executive chairman) to give me precisely what they would want done to ensure they expand and other players come into the industry,” he said.

“I have promised him that with my military background, we will have solutions to such challenges. I am extremely impressed by this factory, what the young people here are doing. It is an example of where Zimbabweans come together and go into a project and succeed despite constraints they have been going through.”

Mr Molai said the annual export target of 10 billion sticks of cigarettes set by Cabinet in July 2014 as part of achieving the Zim-Asset goals would be hard to achieve if industrial espionage went unchecked.

Zimbabwe produces about four billion cigarettes sticks per year.

Said Mr Molai: “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.

“We hope now that officials locally will play their role in protecting the interest of the nation and ensure we achieve our rightful place as an exporter of cigarettes rather than tobacco. The cries by the farmers will be a thing of the past and the reason why they cry is because we are at the mercy of others in terms of exporting raw tobacco.”

Mr Molai 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.

Two officials from TICOZ Protection Services, a local private investigation company, were arrested in 2013 after they were accused of supplying information that led to the robbery of Savanna trucks carrying cigarettes worth over R5 million.

TICOZ was alleged to have been contracted by Forensic Security Services (FSS), a South African firm of private detectives, to spy on local cigarette manufacturers.

FSS had been contracted by a non-governmental organisation called Tobacco Institute of Southern Africa (TISA), with BAT wholly funding the illegal operations.

BAT has denied the spying allegations.

Source : The Herald