Batsa continues legal fight to lift tobacco ban

Group says it must stand up for its customers, suppliers and employees.
Benson & Hedges cigarettes, produced by British American Tobacco. Batsa is not backing down on having the tobacco ban lifted. Image: Suzanne Plunkett, Bloomberg News

The country’s largest cigarette manufacturer British American Tobacco South Africa (Batsa) will legally take on the government for not lifting the ban on tobacco sales, as SA eases into alert level 3.

Beleaguered Batsa says it has made countless efforts to constructively engage with the government since the ban came into force in level five of the Covid-19 induced national lockdown.

This included making detailed submissions, along with other interested parties, to various ministers as well as directly to the Presidency.

“To date, no formal response has been received from the government, and Batsa has also not been included in any of the government’s consultation processes so far,” it says.

But now with the support from Japan Tobacco International (JTI) as well as groups and organisations representing the tobacco value chain across the country – including consumers, tobacco farmers and retailers – it will on Friday recommence urgent legal proceedings to challenge the government’s decision to extend the ban on tobacco sales during alert level 3.

Argument

Batsa’s argument is that the banning of tobacco as a legal product will have dire consequences, as 11 million smokers will opt to purchase illicit cigarettes thus “robbing the government of much-needed excise tax contributions.”

According to the South African Revenue Service, the estimated loss through the illegal cigarette trade for the 2015/16 financial year was R6 billion.

The University of Cape Town’s REET unit says Treasury’s losing R35 million in vital revenue from excise taxes every day that the ban on cigarette sales continues.

In 2019, Batsa contributed R13 billion in taxes, of which R10 billion was tobacco excise. It has a 78% market share of the legal cigarette market in South Africa.

Batsa head of external affairs Johnny Moloto says the company has stated its support for government’s lockdown measures, which were put in place to have time to prepare the health system for the anticipated surge in Covid-19 infections.

He says that based on the Presidential address on May 13 this objective has been achieved, as the government said it would engage in consultations to prepare the country for a further easing of the lockdown and a gradual opening of the economy under alert Level 3.

“Given the situation, and the lack of any response from the government despite our ongoing efforts to engage with them, we are now commencing urgent legal proceedings,” Moloto says.

“The government’s continued ban on legal tobacco sales is threatening the survival of the legal tobacco sector and the livelihoods it directly supports. It has only succeeded in significantly growing a massive and nationwide illegal industry at the direct expense of law-abiding businesses, citizens and taxpayers.”

He says prior to the national lockdown Batsa was the largest manufacturer of tobacco products in the country, therefore it “owes” it to its consumers, customers, suppliers and employees to do everything possible to protect the local legal tobacco trade and to get the prohibition of tobacco products lifted as a matter of urgency.

Tax Justice South Africa founder Yusuf Abramjee expressed his dissatisfaction with the government’s continued stance to not lift the tobacco ban.

“We are disappointed. The government continues to lose out on millions of rands in taxes. The continued ban does not make sense. The illicit trade is booming. Criminals are making big money and they are making more cash by the hour. Most smokers are still getting cigarettes,” Abramjee says.

The World Health Organisation earlier this month said: “A review of studies by public health experts convened by WHO on 29 April 2020 found that smokers are more likely to develop severe disease with Covid-19, compared to non-smokers….Smoking impairs lung function making it harder for the body to fight off coronaviruses and other diseases.”

Minister of Cooperative Governance and Traditional Affairs Dr Nkosazana Dlamini-Zuma explained in a council briefing that the tobacco ban was implemented to protect public health and decrease the potential strain on SA’s health system.

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This is socialist muscle flexing at its finest.

In the supermarket industry they call this practice loss leading. For the NCC, it can only be interpreted as a warning. Basically they are saying do not mess with us and to prove it, let me show you just how completely irrational and malicious we can be, not that we needed further reinforcement of that after Mr T-shirt&Slops made global headlines as a complete laughing stock.

I believe it started with some misplaced advice and possibly with good intentions. Unfortunately i feel it has degenerated into a position of ego driven defiance.

There is no way the government can win this case – so we will land up burning millions in legal fees and then moments before the court ruling is handed down, the minister will revoke the ruling, allowing sales to take place. Once again proving her omnipotence. But drag this out they will.

Just another symptom of the intentional destruction of much needed jobs – from a ruling elite completely detached from reality.

Well stated. When we do not know what policies to expect, when people in power can make arbitrary decisions, then entrepreneurs cannot plan. When entrepreneurs cannot plan, then all economic activity is destroyed. When we have rule of law, then the law brings certainty, and individuals can plan their endeavours.

The opposite of rule of law is not anarchy, it is the rule of man. When people in power can make arbitrary decisions, then we are not ruled by the law, we are ruled by men. We are at the mercy of their humanness, their fallibility, their shortsightedness, their lack of understanding, their personal vendettas, their smallness, their personal agendas, their lack of intellectual capacity and their lack of compassion.

The rule of law was developed as a guiding principle because humans are fallible. When entrepreneurs trust the law, they can plan for decades and acquire finance that will be serviced over multiple decades to provide products and services to consumers. Therefore, consumers, every citizen actually, are the ultimate beneficiaries of the rule of law.

Under the rule of man, the economic system that is supposed to serve the consumer is corrupted to serve only the political elite to the detriment of citizens.

Under the rule of law, every entrepreneur is allowed to make mistakes. Those who make large errors go bankrupt and disappear, while those who make small errors learn from it and grow to build feasible businesses. The error-making process is nationalised and concentrated in the hands of the political elite under the rule of man. There is no trial-and-error process that corrects bad decisions. Bad decisions are enforced by those who have a monopoly on the enforcement of bad decisions. They make all the large errors and citizens pay the cost.

This is why Central Planning is never a good idea. It removes the checks and balances of the free-market system and concentrates all errors in the hands of the Central Planners.

Sounds more like you guys in the 80s. But sure you can call it socialism.

I feel people should be allowed to do what they want as long as they don’t expect private or public healthcare insurance to cover it – but it is too hilarious seeing the addicts and low level alcies doing mental gymnastics to avoid the reality that they are addicts. Or that they don’t have anything else in their lives that gives them happiness.

I hope the sales bans carry on for years! It is hilarious!

Ja apie:

I find the psychology behind people that display your attitude fascinating. (The people saying lekker, government must ban alcohol and tobacco and open toed shoes and surfing and whatever). Schadenfreude mostly stems from deep-seated insecurity or hatred.

What people like you forget is that nothing stops this government from any other irrational and arbitrary action. I see the Doctor has now said sanitising towers are awful and must be banned. He says they are unsafe. Never mind that the food and health industries have been using such (wet and dry) technologies for decades. The man would clearly be out of his scientific depth in a parking lot puddle. And this man is NDZ’s (and your favorite) chief scientific advisor…

Perhaps the zuptas simply are not dialed into making money from tunnels?
Perhaps, who knows, whatever – they felt like banning it because it looked like people prefer it.

Oh, I pity the addicts, I just find their mental gymnastics to justify their sudden concern for tax collection and the industry hilarious.

No hatred. Just mirth.

Perhaps some good will come of this. SA’s jellyfish-like private sector has been all too keen to kneel down before the regime in the past. BAT hopefully learned its lesson now, namely that the cadres’ promises are nothing but hot air.

Not sure I’m happy to forget that BATSA dropped me when I needed them to stand by me. Like I’ve stood by them for 20 odd years by providing them 100s of 1000s of rands.
No, I think I’ll probably switch to JTI, I mean, B&H, Winston and Camels aren’t bad. They also never promised something they were too cowardly to follow through with.
I hope BAT lose a lot of business. And teach other corporations that being loyal to your customer keeps your customer loyal to you.

Would it not be great if BAT puts all the government skeletons on the table. Not holding my breath though.

Amazing. The empathy of rulers. Before corona, living a life depended on finance and luck. Take policing your neighborhood. All done by own imitative, with thanks to local neighbor watching patrols. Real police having no time. After Corona, same police, checking, finding smoking stuff, can result in a criminal charge. All thanks to Corona, rulers starting caring about your health. Incapable to stop looting, or criminals having time of life, they found the escape route. Blaming tobacco and alcohol for county and your misfortune. Worst of all, the effort done, makes the informal criminal sector booming.

Talk about being late to the party!

Wake up BAT and others. The fact that you guys got sucked in with a ‘promise’ from Govt (how many weeks ago was that?) and then to have legal proceedings halted a second time following further meetings and ‘promises’, that Dr NZ then scuppered, all go to show that once you got authorisation to manufacture and export, you tucked the proverbial tail down below and gave your local customers both big middle fingers.

NOW you want to be seen to be coming out strong!!!? Sorry Boets this does not fly. You guys are spineless and lack courage and commitment to your customers, who happen to be the lifeblood of any business.

Ever since the Crisis-that-may-not-go-to-waste the government’s interaction with industry resembles that of a cat playing with a small, helpless rodent.

I am not a smoker, but good for them. When I listen to the twaddle by that self-appointed “general” who is sorely missed in North Korea, I cringe:“If it (i.e., cigarettes) is prohibited to be sold, it is prohibited to be bought… Police have a right to seek the receipt of where you have bought the cigarettes… The onus is on you to tell us, where did you buy those cigarettes”. The Regulations proscribe only the sale, not the purchase of cigarettes. A statute (and a regulation) can only criminalize by express prohibition; not by implication. It is, accordingly a criminal offence under Regulation 27 to sell cigarettes; it is not an offence to buy them, and only a seller can be prosecuted. Police have no right whatsoever to demand anything from you and even if arrested can demand no more than the disclosure of your name and address.

I applaud their efforts to lift the ban, but fighting against the government is difficult. They are the court!

The tobacco ban detracts from real problems faced by the country. Restarting companies and helping people get back to work in a safe way should be the focus. Unban tobacco sales – in tbe end it will need to happen, and let’s focus on the real problems.

The audacity of the tobacco industry using the loss of taxes, and the fact that ‘legal cigarettes being less harmful’ as an excuse is laughable. The taxpayer spends billions every year treating smoking related diseases. The tax govt collects only covers less than 10% of the associated medical costs due to smoking. So in effect we are subsidizing the tobacco companies existence. Secondly, if the ban is lifted, I bet you people will be spending most of their govt covid-19 emergency grants on cigarettes. I have no sympathy for tobacco companies. Do you think they will contribute to your cancer medical bills?

So where do you draw the line ?
What about the medical problems associated with alcohol ? Or overweight
people, or people with sugar diabetes ?
We subsidise them as well.

Corona will be done and dusted by the time any meaningful court ruling is handed down- NDZ has taken a *gold* leaf out of her ex hubbys book, “take it to the courts if you will” as she waves you out the door, she knows that what ever happens the govt will appeal ad nauseum to buy time. In the interest of all South Africans BAT should actually run with this case all the way to the Concourt, get a final determination (and future guidance) as to how the govt and COGTA reacted (rationally & legally to the Corona crisis) that may allow for better outcomes when Covid 20 or a bout of the catflu appears and they want to try this lockdown gig again.

He he! Someone is making a sh*t-load of money out of this ban. I wonder who that might be, considering that our government is purer than the driven snow

End of comments.

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