Smuggled cigarettes killing local manufacturers

Indications are that the influx of huge quantities of smuggled cigarettes from neighbouring Togo is threatening the survival of local cigarette manufacturing companies.

The situation has exposed the inability of the Customs Excise and Preventive Services and other security agencies to effectively clamp down on the smugglers of these cigarettes resulting in the lose of billions of cedis in tax revenue to the government.

The influx of cheap, smuggled products onto the Ghanaian market and its impact on local manufacturers is it self not a new phenomenon.

The trend has been cited as one of the key factors leading to the collapse of the country's textile sector.

Now it's the local cigarette manufacturers that are feeling the heat generated by smuggling.

There are indications that Aflao and Kpalime in the Volta Region are the key entry points for a large component of smuggled cigarettes especially the Bond Full Flavour and Bond Menthol brands manufactured by Philip Morris International.

Players in the sector believe that these smuggled brands make up about 10 per cent of the market share.

Some distributors say the Bond Menthol brand is fast capturing a greater proportion of the market.

The situation is has become a headache for local cigarette manufacturers. Officials of British American Tobacco and International Tobacco Ghana are complaining that the influx is eroding their earnings.

British American Tobacco says while it pays 300 billion cedis in excise duties to government annually, the smuggled Bond brands contribute no revenue into government coffers.

Operators in the sector estimate that government looses nearly ?30 billion in revenue to the activities of cigarette smugglers.

Consumer activists also worry about the questionable quality of the smuggled products since there is no effective monitoring of such products.

However local manufacturers seem helpless in dealing with the situation and are calling on the security agencies to step up efforts at dealing with what they see as a clear and present danger to the local industry.