Competition Commission probes removal of cigarette brands from Spar

The Competition Commission is investigating the removal of certain brands of locally-produced cigarettes from the shelves of Spar, according to the Sunday Times.

The newspaper on Sunday referenced two internal Spar emails from a senior manager stating that Spar shops should not stock certain brands from the Fair-Trade Independent Tobacco Association, or Fita citing an Ipsos study, among other things.

In 2018 the Tobacco Institute of Southern Africa (Tisa) commissioned research by polling company Ipsos, which found that certain cigarette brands were being sold at below the excise tax threshold. The Ipsos study reported that one brand - RG - was in the Gold Leaf stable. Gold Leaf is a member of Fita.

Competition Commission spokesperson Sipho Ngwema confirmed that it had been approached by Fita, but said at this stage, a preliminary investigation was underway.

"That means we want to ascertain whether or not the complaint has merit in terms of the Competition Act," said Ngwema.

Spar spokesperson Kerry Becker, said on Sunday, "We have been approached by and are co-operating with the Competition Commission in this matter. We do not believe it is appropriate to comment in the press at this stage." 

Sinenhlanhla Mnguni, Fita chairperson, told Fin24 via WhatsApp that, in the association's opinion, the removal of some of its members' brands from Spar shelves amounted to anti-competitive practices.

Fita has seven members, including Carnilinx, Amalgamated Tobacco Manufacturing and the Gold Leaf Tobacco Corporation.

Tobacco wars

Fita has been involved in a public relations battle with rival industry body, Tisa , whose members include the SA division of British American Tobacco and the Phillip Morris South Africa Group of Companies. 

Tisa has argued that the SA Revenue Service is losing billions of rands in tax receipt from cigarettes not being sold at price. 

Gold Leaf, meanwhile, previously told Fin24 that the study was an attempt by Tisa members to take a bite out of its market share.

"This is wholly denied. All our brands are registered with SARS and all excise [taxes] are paid on our products," the company said.

Fita has also denied the findings as represented by Ipsos and Tisa, and has in turn accused the rival industry body of having the goal of "direct[ing] law enforcement agencies towards our members."

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