FITA holds breath on legal route to nip government's tobacco ban in the butt

2020-04-22 13:14

The Fair Trade Independent Tobacco Association (FITA) said on Wednesday that it will wait until Friday before serving government with legal papers to force it to lift the ban on the sale of tobacco products.

FITA had initially planned to initiate the legal route on Wednesday, but given President Cyril Ramaphosa's announcement on Tuesday that he would address the nation on Thursday on the measures that will be taken beyond the nationwide lockdown to reopen the economy, the organisation has decided to wait for clarity on those measures.

Ramaphosa announced an unprecedented R500 billion social and economic support package to mitigate the impact of the coronavirus pandemic on the country.

With South Africa on lockdown since 27 March until 30 April, for the time being, the selling of tobacco products and liquor has been prohibited.

In a 24-page lawyer's letter on Monday, FITA pleaded with government to reconsider the nationwide prohibition of cigarettes.

It argued, among other things, that the prohibition is forcing people to contravene lockdown regulations by unlawfully obtaining tobacco products, and that it has a devastating effect on the economy, particularly the tobacco industry service chain, which could see jobs being lost.

Legal representatives for the Presidency responded on Tuesday evening, hours before Ramaphosa's address, stating that government was still consulting all relevant parties involved and would revert in due course.

FITA chairperson Sinenhlanhla Mnguni told News24 on Wednesday that, given the circumstances, it would be foolish to go to court knowing the amount of pressure government was already facing without giving it a reasonable amount of time to respond. 

"The response from government is not unreasonable and a court would see it as such," said Mnguni.

"A second problem we face, in as far as our application goes, is that the president could make an announcement on Thursday that would make our demands redundant. We may then have to withdraw our application altogether and start from scratch."

Opposition gaining traction

Mnguni said FITA would consult on Wednesday and make a call whether it would launch an application on Friday.

"We don't anticipate that the matter will be heard this week in any case, at least not before the president makes his next announcement."

He would not speculate as to whether he expected Ramaphosa to lift any restrictions on the sale of tobacco products.

"We are like every other South African - we don't know. Obviously we would love for him to lift the ban on the sale of cigarettes, as per our argument."

Mnguni said that opposition to the ban on cigarette sales has been gaining traction, with commentators and other role players weighing in on the issue.

"Going to court is not an option that we take lightly. We understand the challenges government is facing.

"The president's announcement [on Tuesday] hinted at a gradual lifting of the current restrictions. Whether the lockdown is extended or not, we are not sure that it will include the ban on cigarette sales."

According to Mnguni, FITA has never tried to force government's arm regarding this, but it has rather tried to seek engagement on the issue.

"But the industry is bleeding. For example, [tobacco] farmers can do nothing with their crop. It's pointless to farm if the value chain is not active."

Health Minister Zweli Mkhize has supported the ban on the sale of cigarettes and alcohol during the lockdown, saying they had a negative impact on the health of people who had tested positive for coronavirus.

On Tuesday, Cooperative Governance Minister Nkosazana Dlamini-Zuma said lifting the ban on alcohol and cigarette sales would undermine the essence of the lockdown completely.

Rise in illicit cigarette trade

That said, government's decision to ban cigarette sales during the coronavirus lockdown period will unintentionally give rise to illicit trade in tobacco as smokers are highly likely to end up buying from underground traders selling illicit products, tobacco manufacturer British American Tobacco South Africa (BATSA) warned on Saturday, Fin24 reported.

In its view, this would result in a setback for the recent strides made by government to try and clamp down on the illicit tobacco trade.

Tax Justice South Africa (TJSA) has also called on Ramaphosa to lift the ban.

"The financial impact of the cigarette ban alone is devastating, as it costs the Treasury R35 million [per] day in lost excise revenues. South Africa's 11 million smokers feel persecuted and illegal traders are cashing in. 

"Illicit cigarettes are flooding the market at massively inflated prices, delivering no tax to the country and actively increasing the movement of people – the very thing the lockdown is supposed to prevent," TJSA director Yusuf Abramjee said in a statement.

Read more on:    fita  |  economy  |  health  |  lockdown  |  coronavirus

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