Lockdown | Cigarette ban to remain under level 3, but you can buy booze

SA may need "less orthodox" approaches to finance the unprecedented R500 billion stimulus package announced by Predident Ramaphosa, say economists.
SA may need "less orthodox" approaches to finance the unprecedented R500 billion stimulus package announced by Predident Ramaphosa, say economists.

The sale of cigarettes and tobacco products will remain banned as the entire country transitions to level 3 of the national lockdown from June. But consumers will be able to buy alcohol for home consumption only on "specified days and for limited hours".

During an address on Sunday evening, President Cyril Ramaphosa announced that following consultation with various bodies, Cabinet decided that the whole of South Africa would move to level 3 next week.

Cigarette and tobacco products have been banned since the start of the nationwide lockdown in late March, despite opposition from industry bodies. 

The move to level 3 will see more sectors of the economy open for business, said Ramaphosa. Industries that reopen will have to institute health protocols to limit the spread of Covid-19.

"The implementation of alert level 3 from the beginning of June will involve the return to operation of most sectors of the economy, subject to observance of strict health protocols and social distancing rules," the president said.

"Alcohol may be sold for home consumption only under strict conditions, on specified days and for limited hours," he said. Details will be announced once government ha consulted with the sector.

"The sale of tobacco products will remain prohibited in alert level 3 due to the health risks associated with smoking," Ramaphosa said.

The Fair Trade Independent Tobacco Association (FITA), whose members include cigarette makers Carnilinx and Gold Leaf Tobacco, has launched a court bid to have cigarettes and tobacco products be declared essential goods and to be sold. Government has warned against the health risks associated with smoking.

Speaking to Fin24 shortly after the president's announcement, FITA chairperson Sinenhlanhla Mnguni said it was "mindboggling" that government would permit the sale of alcohol, but not cigarettes. Government's reasons for the banning of tobacco product and cigarette sales are due to be filed as part of the court process on Tuesday, 26 May.

Mnguni said that FITA has tried to engage with government outside of a court process, to lift the ban, but it has not been successful. "We have previously attempted to engage with government. There has been a clear reluctance to engage the industry, an industry which contributes billions to the economy,"  he said.

Both the SARS commissioner Edward Kieswetter and Finance Minister Tito Mboweni have said the ban on these products would impact revenue collection from excise duties.

"If the avenue to engage with government existed, we would explore it. But at this stage, I am not too certain there is such an avenue. The president was quite unequivocal today in his announcement," Mnguni said. 

While a date for the court hearing is expected to be set in the week of 9 June, failing that, it will be set for hearing in an urgent court on 9 June.

Reopening the economy

Sectors such as manufacturing, mining, construction, financial services, professional and business services, information technology, communications, government services and media services can commence full reopening, Ramaphosa said in his address. 

"Wholesale and retail trade will be fully opened, including stores, spaza shops and informal traders. E-commerce will continue to remain open," he added.

However restaurants, bars and taverns will remain closed, except for the delivery or collection of food. Accommodation, domestic air travel except for business, will also be closed. Business travel will be phased in.

Other sectors which cannot reopen include conferences, events, entertainment and sporting activities. Personal care services, including hairdressing and beauty services will also remain closed.

Ramaphosa said that government will rely on social compacts to address risk factors associated with the spread of Covid-19 at the workplace, and between employees and the public. The social compact will work together to finalise sector protocols, and companies will be required to develop a workplace plan before reopening.

"According to these plans, companies will need to put in place sanitary and social distancing measures and facilities; they will need to screen workers on arrival each day, quarantine those who may be infected and make arrangements for them to be tested.

"They also need to assist with contact tracing if employees test positive," Ramaphosa said.

Those over 60 and those who suffer from conditions such as heart disease, diabetes, chronic respiratory disease and cancer should "ideally" stay home, Ramaphosa said.

Employees who can work from home, should be encouraged to do so, he added.

Ramaphosa said those commuting to work should wear masks, and wash their hands, and keep a safe distance from other commuters. Businesses have also been asked to stagger work hours and provide transport for employees to reduce congestion in public transport.

This article was updated on 24 May, 2020 at 20:30 to include comment from FITA.

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