British American Tobacco South Africa (Batsa) has requested urgent clarity on the decision-making process that led Minister of Cooperative Governance and Traditional Affairs (Cogta) Nkosazana Dlamini-Zuma to announce an indefinite ban on the sale of tobacco products.
The government has been given until 10:00 on Monday (May 4) to respond, failing which Batsa will bring an urgent application to court.
Various political parties, trade unions, businesses, industry associations and other interested parties had made submissions on the tobacco ban during the Level 5 lockdown. The government had purportedly taken these into consideration prior to President Cyril Ramaphosa’s address to the nation on April 23, wherein he announced the lifting of the ban under Level 4, effective from May 1.
The president further announced that his National Coronavirus Command Council (NCCC) ministers would outline the regulations and directives to support and transpose the national transition to Level 4, which included the sale of tobacco products.
On the president’s announcement of the lifting of the tobacco ban, Batsa commenced preparing for the resumption of sales.
Less than a week later, however, there was a complete about-turn when Dlamini-Zuma on April 29 proclaimed an indefinite tobacco ban, based on some 2 000 submissions via a public consultation process requesting a continuation of the ban.
Dlamini-Zuma said that some 70 000 submissions had been received across a variety of topics, including 20 000 related to exercise.
This begs the question: if the president’s announcement was arrived at under the established agreed-upon criteria pertaining to Level 4, how did Dlamini-Zuma arrive at a different outcome?
Batsa is of the opinion that Dlamini-Zuma’s action is “in itself, bizarre and highly irregular, principally because she did not give the tobacco industry, retailers, tobacco consumers and others supporting the lifting of the ban the opportunity to comment on the proposed reinstatement of the ban”.
“This was grossly unfair and unlawful.”
According to Batsa, within 24 hours of Dlamini-Zuma’s statement, some 400 000 people had supported a public petition seeking the lifting of the ban on cigarette sales, somewhat dwarfing the 2 000 who had allegedly previously made submissions in support of the ban.
‘Impossible’ not to draw conclusions
Batsa is of the view that: “It is impossible not to conclude that this hastily announced and ad-hoc ‘second consultation’ was, from its inception, designed to deliver a completely pre-determined outcome and provide the veneer of ‘cover’ for a decision, made elsewhere, to reverse President Ramaphosa’s correctly announced decision to relax the restrictions on the sale of tobacco products under Level 4 of the government’s Risk Adjusted Approach.”
In her announcement, Dlamini-Zuma speculated that poorer people who share cigarettes would be more likely to pass the virus to each other.
This, in Batsa’s view, is wrong in both law and in science, and would in any event not be possible if the government’s social distancing guidelines were adhered to.
Millions to the fiscus already lost
According to Batsa, R13 billion was paid to the government in the form of excise, corporate, income and other taxes in 2019. Furthermore, the company supports more than 10 000 jobs across the country. It also purchases 90% of all tobacco leaf produced in South Africa by farmers in provinces including Limpopo, Mpumalanga, KwaZulu-Natal and the Eastern Cape.
During a virtual meeting on April 30, South African Revenue Service (Sars) Commissioner Edward Kieswetter advised parliament’s finance, appropriations and public accounts committees that the loss on excise duties on cigarettes for the month of April will be just under R300 million. Batsa puts the loss at R36 million a day.
Encouraging the illicit market
Kieswetter is also of the opinion that the banning of the sale of tobacco products will encourage the illicit market. This view is supported by the Human Sciences Research Council, which published research showing that illicit cigarettes had been widely available during the Level 5 lockdown.
No taxes are paid on the sale of illicit cigarettes.
Finance Minister Tito Mboweni has publicly stated that legal cigarette sales should resume under Level 4 of the lockdown.
Batsa has requested Dlamini-Zuma to amend the latest version of the regulations promulgated in terms of the Disaster Management Act of 2002 (being those dated April 29, 2020, published on page 3 of Government Gazette No 43258 of the same date), by the deletion of paragraph 27 in terms of which the sale of tobacco, tobacco products, e-cigarettes and related products is prohibited, and including them as permitted goods in Part E of Table 1.
Batsa acknowledges that there are risks associated with the smoking of cigarettes, “but there is no evidence that connects smoking with an increased chance of contracting Covid-19”.
The government recently tweeted: “Using tobacco products can increase your chance of getting #Covid19. Health experts have also warned that smokers with Covid-19 likely suffer more serious conditions that could lead to premature death.”
It is a moot point that the regulations introduced under Covid-19 should be justifiable within the parameters of the aims of the National State of Disaster and assist in containing the spread of Covid-19. The government’s credibility may rest on the peer-reviewed scientific data backing this up being made publicly available.
Read: BAT South Africa urges government to lift cigarette sale ban (published April 4)
Barbara Curson holds shares in Batsa.
Barbara Curson visited the British American Tobacco Kenya tobacco plant in 2019, at their cost, to observe the workings of the ‘track and trace’ system for tobacco products.