Tobacco court case only likely to be heard in two weeks’ time

In prison, cigarettes have always been currency. Now the whole country knows what it’s like.
Consumers are switching brands. Image: Gillianne Tedder, Bloomberg

If the idea of the cigarette ban is to preserve the health of the nation, it’s not having much of an impact.

Smokers are getting their fix, albeit it three times the usual price. And they’re trading down. Marlboro smokers are finding the much cheaper RG brand quite acceptable. A carton of 200 RG goes for R650 on the black market, but that price is going up as stock becomes harder to source.

When the ban is eventually lifted – either by government fiat or on the instructions of a high court judge – the cigarette market will likely be forever changed. Some of the 11 million smokers in SA may have ditched the habit, but others will have permanently switched brands, which should be good for lower-cost producers such as Gold Leaf, but not so good for higher-end producers such as BAT.

Sars has been snookered

And, as Tax Justice SA has pointed out, the illicit trade which SA Revenue Services (Sars) has worked so arduously to stamp out has resurfaced with a vengeance. This time, it won’t go away so easily, which means a permanent loss of revenue to Sars, which has already lost about R2 billion due to the ban.

The illegal trade, which never went away, now rules the market. The idea of stamping it out, even after the ban is lifted, seems hopelessly unrealistic.

As one senior business leader commented, this is what happens when bureaucrats and ministers run the economy. The ban has blown jumbo-sized holes in SA’s already porous borders. 

Court challenge

Meantime, the Fair-trade Independent Tobacco Association (Fita), representing smaller producers for the main part, says its court challenge against the government ban is likely to be heard two weeks from now.

It’s being brought as an urgent matter, but the hold-up is on government’s side.

It has been ordered by the high court to provide Fita with a record of decision showing how it came to the decision to impose the ban in the first place. This will allow Fita to supplement its affidavit and government will be given a few days to reply to that. 

Fita chair Sinenhlanhla Mnguni is feeling the burn of 11 million smokers and eight producers on his neck every day: “Whether this ban is lifted by government or not, we have to go through with the case.

“The real issue here is whether government has the power to arbitrarily shut an industry based on no real data.”

DA leader John Steenhuisen told eNCA that the responsible minister Nkosazana Dlamini-Zuma (Cooperative Governance and Traditional Affairs) appears to be on a personal crusade when it comes to the cigarette ban, and is opposed by other ministers in her own cabinet.

It makes little sense, he says, to lift the ban on alcohol sales from  June 1 but not on cigarettes.

The decision to impose the ban has been made for “health reasons”, but there is no basis in law for such a sweeping interpretation of the Disaster Management Act, according to Fita lawyers.

Several lawyers contacted by Moneyweb have argued the government should be on a hiding to nothing on this case.

Simon Rudland, co-owner of Gold Leaf Tobacco, says the company’s Johannesburg factory is able to operate at 30% staffing capacity, but only for export. “There seems to be very little logic or reason behind the decision to ban cigarette sales, and we find it quite mystifying. We are coming up for the second month where we have to meet payroll and we’re unable to operate fully. I don’t know how much longer we can continue with this, and at what point we have to file for business rescue.”

Rudland says the group’s other businesses in Zimbabwe, Malawi, the Democratic Republic of Congo, Zambia and Kenya are all fully able to operate.

“SA is the only country in the world that has imposed a ban in this manner,” he says.

The losses are huge

In support of Fita’s court case, Gold Leaf CEO Ebrahim Adamjee outlined the impact of the cigarette ban on the company: in April and May 2019 it paid R437 million in excise to Sars, and a further R60 million in Vat. The loss to Sars this year for the same two-month period is likely more than R510 million, in addition to a daily loss of profit of R801 000 to the company, threatening the future of 354 workers and their families.

That story is being repeated across the tobacco manufacturing sector. 

Moneyweb has learned that several other groups may bring legal and other challenges to lift the ban, but more importantly to make sure government is never again able to shut down a part of the economy with no apparent reason.

Had the government invoked the State of Emergency Act rather than the National Disaster Management Act, it would have been subjected to far more scrutiny and restrictions than is currently the case. 

If there is any certainty in this, it’s that this period of SA’s history has launched an armada of legal challenges that will roll out for years to come.

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She is a con artist.

She uses a smoking session timeline as a large part of her argument. She tries to enhance it by saying is is “published” by the WHO. Like they spent years in researching the subject.

Google “quit smoking timeline” and you get over 3 million hits. All more or less the same thing. Then Google “WHO Quit smoking timeline” Nothing from the WHO comes up. Strange. This timeline has been in existence and known to the world for longer than the WHO has been in existence.

Main thing is quitting has nothing to do with fighting the virus and with smoking being legal it deprives you of your right to smoke when you are forced to stop this way.

It also has a lot of negative effects to stop cold turkey and this lot has not considered any of that. This could affect some people for the rest of their lives.

I don’t smoke but have noticed a few things. They wont hesitate to infringe on your rights. CR did not do his homework and is obviously not in charge and a very weak leader. The courts are complicit if they only have time in 2 weeks time for this urgent matter.

The public (no matter if you smoke or not) need to take action about this. This is just the start of what is to come.

NDZ seems to think you can develop a lung complication by smoking in 2 months, or conversely your emphizema will disappear in 2 months.

Eastern medical school training.

2 months? African public school maths there.

The ban has been roughly 2 months, hasn’t it?

Yes, but did you read? It isn’t over.

When the next election happens, the political parties can have a lot of fun reminding voters about the misery and amusement of the ban on alcohol, tobacco and open-toed shoes. If there is another election while the Command is in Charge

Yeah, I think you have bigger election issues than the whining alciesand addicts drying out in the suburbs. Sorry, even your electorate simply isn’t that immature.

Ja apie:

For the last 25y the electorate did not behave rationally. Maybe all they needed as something trivial but personal to get them to wake up. Unlike most any other topic, at least alcohol and tobacco and curfew and open shoes crosses all the race barriers.

They will blame the Virus and Apartheid – millions of voters who have no internet and cant get real news (other than SABC) will return ANC – for decades to come.

I quite like the idea of black market cigarettes. There are no taxes to be paid, screwing Sars and the country even more.

Ha ha I like that idea, it also sprang to mind that maybe NDZ’s friends in the baccy business may be making less than what the cadres are stealing from SARS and baccy taxes.

I am not a smoker, but when that arbitrary and unlawful prohibition, founded in very selective and currently uncertain science, is set aside, the massive damages claim against the State and certain ministers will inevitably follow, hopefully with costs on a punitive scale against those very ministers …

Ministers are protected – by Law

Tobacco industry applauds your support.

Unfortunately the tobacco industry is NON essential.

No matter what concocted argument its PR machine makes about it, it must be the last industry to reopen.

The soda drinks and sweets and chips industries are essential? Think before you post.

Glycolysis?

It’s a “maintenance service” Maintains dress size.

You are commenting on the wrong website, casi_negro (an offensive non-de-plume to start with). Moneyweb is frequented by people who believe in civil liberties, the free market and peoples’ innate right and ability to steer their own destinies. No room for goverment sycopanths here.

Yes, like most on this website voted Yes in 1992, for international sports and liberties? Now bemoaning endlessly their misfortune..

Go figure, mostly sheep.

Imagine been offended in behalf of someone else. Race card much?

Define non-essential..there is no such thing as a non-essential business.

The only example I could think of are the SOEs but they are not really businesses.

Don’t you cry next year when Taxes and VAT is raised to make up the short fall in TAX revenue. Type 2 diabetes, being overweight eg eating chocolate, sweets and sugary drinks and other products are also a health risk for Covid patients but are deemed essential. Where does one draw the line.

We know the main reason why the Tobacco ban continues.

Sadly my cigarettes which I bought legally b4 lockdown has run out and had to fork out thousands of Rand to get my fix on the black market. Sorry SARS something I did not want to do.
WS

The idea of the state determining what is essential and what isn’t is at its core a communist notion. “…to each according their need”

I believe in freedom and liberty and that means that the individual decides what they need, and more than that, what they WANT.

I bet your house is filled with things you don’t need, but they are things you want, right Likewise if people want to smoke and are aware of the health risks, it should be their decision and not that of a nanny state making the decision for them.

Smokers are already being penalised to restricted areas of at least 2m from others which corresponds with lock down distance-So what let them smoke.

Good point. Maybe the reason less smokers are infected.

So I don’t smoke. I find it ironic that I’m arguing for something I don’t particularly like. I guess the enemy of my enemy is my friend.

Wow! You must be a true free thinker!

A French hospital, Pitié-Salpetriére Hospital, did a Covit-19 research on 480 corona infected patients and found that, while 25% of French are smokers, among the corona infected people the percentage was only 5%. A 1 on 5 ratio!

This research followed earlier findings in Paris that among 11000 hospitalized patients the percentage of smokers was about 8%, compared to the 25% French smokers a 1 on 3 ratio!

In March a Chinese study on 1099 infected patients found that the number of smokers was 12.6% compared to 28% of Chinese smoking.

The French preliminary conclude that tobacco may contain an agent which is a protective factor at Covid-19 infections. They now try nicotine patches on patients` skin.

The Guardian of 22 April 2020 (theguardian.co.uk) reported on the above.

Wow, late breaking news here! It is almost like people lie about smoking when trying to be treated for a respiratory disease. Try and keep up.

After this legal battle, only GUN SMOKE would fill the room!

End of comments.

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