Gold Leaf Tobacco (GLT) suffered heavy losses of US$800,000 after being compelled to recall stocks from the market and destroy material after the Zimbabwean High Court barred the company from packaging and distributing cigarettes bearing the RG brand.
The High Court bar last September came a month after GLT unveiled the new brand on grounds it prejudiced competitors, Savannah Tobacco, which is licensed to manufacture the Remington Gold brand of cigarettes, also abbreviated as RG, locally. GLT has challenged the court decision, but re-launched its cigarettes as Rudland & George late January 2017 in Harare.
“The greatest cost has been a disruption in business because we had to pull down our marketing communication material, we had to pull down our product from the shops to comply with the court interdict,” said GLT country manager Tanaka Matimber.
“The bulk of it is the cost of the duties that we had paid on the cigarettes as we brought it into the country,” he said. “The cost of rebranding and basically redesigning or packaging development and launching the product back on the market, so that’s a huge cost and we are looking at over US$800,000 in terms of the investment that went down the drain.”
“We firmly believe we have to get back to business and focus on what we do best which we do best, which is selling cigarettes,” he added. “We believe there is room for everyone to play in the market and we see ourselves growing very well in the next 12 to 18 months. We are here for the long haul (and) we are setting up to be the biggest supplier in southern Africa and the rest of Africa.”
Rudland & George cigarettes are currently being produced in Johannesburg through GLT’s sister company. However, plans to start setting up a manufacturing plant in Harare are underway.