BAT drops plan to sue over cigarette-sales ban

British American Tobacco Plc will begin negotiations with the South African government instead of taking legal action.
Image: Bloomberg News

British American Tobacco Plc will begin negotiations with the South African government instead of taking legal action to overturn a national ban on cigarette sales now in its sixth week.

South Africa blocked the trade of tobacco products in late March as part of a lockdown to contain the spread of the coronavirus, and was set to lift the restriction last week before a last-minute u-turn. BAT said at the time the government should reverse the decision or face the risk of legal action.

President Cyril Ramaphosa’s administration needs to make a “renewed and stronger effort” to “permanently close down the illegal supply lines of tobacco that have been established over the past number of weeks,” BAT, which makes Peter Stuyvesant, Dunhill and Lucky Strike cigarettes, said in a statement. “Reopening the legal, taxed and regulated tobacco market must be part of the solution.”

BAT shares rose as much as 1.7% in Johannesburg, where it has a secondary listing, on Wednesday, after four sessions of losses. The stock has gained 16% this year, giving the company a market value of R1.6 trillion ($87 billion).

South Africa’s decision to ban the sale of tobacco and alcohol products has resulted in a “thriving illicit economy” and effects of the lockdown and a slowing economy could see a shortfall of R285 billion in tax revenue for the year, Edward Kieswetter, the commissioner of the South African Revenue Service, told lawmakers on Tuesday. Both moratoriums could be lifted as part of a phased easing of lockdown restrictions, with controlled sales penciled in for so-called Level 3, the next stage of the economy’s re-opening.

“We urge government to consider an approach that will address their concerns, while also ensuring legitimate businesses can contribute to this country’s economy and future growth,” said a BAT spokesperson.

Before the Covid-19 crisis and the lockdown, South Africa started to make progress in tackling the rampant illicit trade in cigarettes, which was costing South Africa more than R10 billion, according to BAT.

© 2020 Bloomberg

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No rush anymore.

People have stocked up and have months worth of supply now as there is no indication of when it will open again if ever.

Prices have gone up from R250 per carton to R450 per carton but better safe than sorry I guess.

People will be smoking the illicit cigarettes for a long time to come.

BAT: apply for bankruptcy protection. That should get their attention.

It was always a bluff, to threaten that they would go to an established court of law and to present a dubious argument that smoking tobacco, inhaling nicotine infused smoke and or vaping that is dangerous for the public pulmonary health, is somehow a vital and necessary service, that the government has no outright right to outlaw the sale thereof during this pandemic.

I am sure they feared that what they might be required to reveal there, not only in terms of how many cigarettes they actually sell and what taxes they really pay, it then dawned on them that that the benefit of going to court is far outweighed by the risk of any such move. So, what do you do, you reverse course and come out here and act like a Good Samaritan. So rich, of irony – if it was not a iteral matter of life and death.

Exactly,

All for profit masquerading as “freedom” for the intolerant minority with their rights above every body else..

get a patch at the pharmacy

WTF to Batsa – these guys have already been scr*w*d once and they roll over for more.
Further, when will this all be happening and what is the deadline?

Nowhere does it mention why BAT dropped its case and chose to negotiate with the ruling despotic thieves. For an article to have genuine newsworthiness, you’d need to tell us the truth.

End of comments.

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