Tobacco Commission (TC) says owners of nested or mixed tobacco will only get half of their proceeds as the regulator has imposed a 50 percent penalty on the earnings to discourage the malpractice.
In a statement on Tuesday, TC said about 170 223 kilogrammes (kg) of nested tobacco raked in $374 033.74 (about K655 million), which means owners will only access K327.5 million.
Reads the statement in part: “The confiscated nested tobacco bales were re-handled by commercial graders and were re-offered for sale on Tobacco Commission registration number.
“The commission has since imposed on the owners of the confiscated nested tobacco a penalty of 50 percent of the proceeds from the sales.”
However, the commission said from the 2025 marketing season, it shall be retaining all proceeds from confiscated nested tobacco bales to ensure that the malpractice is entirely curbed.
In an interview on Tuesday, TC spokesperson Telephorus Chigwenembe said owners of the confiscated nested tobacco bales will get their proceeds through bank accounts registered with AHL Group.
He said: “The payments are expected to start before the end of the week beginning November 4 2024.
“We have been lenient this year by imposing 50 percent penalty because the law against nesting, which involves mixing of tobacco and non-tobacco materials among others, was enacted this year so we did not have enough time for sensitisation.”
Tama Farmers Trust president Abiel Kalima Banda described nesting as a form of cheating, saying it is meant to deceive buyers on quality and volume and has the potential to dent the image of the country’s tobacco industry.
“Such acts are prohibited and we are sensitising farmers to the likely impacts. We hope with proper awareness, there will not be many cases of nesting in the forthcoming season,” he said.
According to Section 96 (8) of the Tobacco Industry Act 2024, nesting is an offense and the commission is empowered to confiscate all nested tobacco bales offered for sale.
Meanwhile, TC has this far licensed about 52 000 tobacco farmers to grow 229 million kilogrammes (kg).
Chigwenembe, who indicated that the licensing exercise closes today, said they do not expect the buyers’ demand to differ from last year’s licensed volume of 190 million kg by a wide margin.
Last season, TC licensed about 43 000 farmers to grow 190 million kg of tobacco, but the farmers ended up producing 133 million kg, which raked in $395 million (about K692 billion), a 40 percent jump from the previous year’s $282 million (about K493 billion).
Tobacco brings in about 60 percent of the country’s foreign exchange earnings and contributes around 13 percent to the country’s gross domestic product.
In August last year, Malawi ratified the World Health Organisation Framework Convention on Tobacco Control, joining a community of 182 other parties to the convention.
This affirmed the country’s high-level commitment to combating the global tobacco epidemic and prioritising public health and well-being.
The convention is touted as a critical international treaty to address the public health risks associated with tobacco consumption and exposure to tobacco smoke.
