WeeklySA_AdminTHREAT: Retailers warn ban will shut down businesses while opening floodgates for illicit traders…
By WSAM Reporter
The new Tobacco Bill, which proposes a total ban on the display of all tobacco products across all retail channels, pose grave problems for all tobacco product retailers and hundreds of jobs in the industry.
This is growing protesting voice from various sectors in the tobacco industry opposing the new Bill, describing it as being draconic, and risking seeing consumers and retailers facing up to 10 years in prison for disobeying the law.The Cancer Association of South Africa ( CANSA) however, has supported the new Bill saying it would save lives.
Tobacco industry players have criticised the Health Department’s Tobacco Products and Electronic Delivery Systems Control Bill, saying it stops just short of the prohibition of smoking. The Bill, they say, intends punishing the smokers instead of focusing on regulating the industry and targeting the illicit tobacco market. The proposed smoking laws would also negatively affect thousands of small businesses countrywide as well as the jobs they provided. British American Tobacco South Africa and the Limpopo Tobacco Processors have voiced their opposition to the Bill.
Parliament’s Health Committee said the aim of the Bill was to regulate the sale and advertising of tobacco products and electronic delivery systems like vapers. Consumers could face up to six months in jail for smoking inside a car with a child around.
Francois van der Merwe from the Limpopo Tobacco Processors has called on all those in the legal tobacco industry to challenge the Bill.
“Now why do I bring prohibition into this talk? It is because the new Bill stops just short of prohibition. It is almost a prohibition and we know prohibition does not work.”
Lorraine Govender, CANSA’s National Manager of Health Promotion, supported the new Bill and said it would help free South Africa from the crippling impact of non-communicable diseases, including cancer. “We have long campaigned for better measures that can free South Africa from the crippling impact of non-communicable diseases, which are currently responsible for the deaths of 50.9 percent of South Africans. Tobacco use is a major risk factor and is currently estimated to cost South Africa R42-billion per year in treating illnesses and loss of productivity.
“We must take action to free our economy from further strain and we look forward to stronger legislation that will better protect our rights to freedom and health.”
Johnny Moloto of British American Tobacco SA, has been reported as saying that the Bill was a missed opportunity by the government to regulate the industry and target the illicit market, but it instead wanted to ‘’punish the smoker”.
The tobacco industry has indicated that the proposed smoking laws would kill thousands of small businesses and the jobs they were providing.
A survey conducted by Clippa Sales and Casa Tabacs among nearly 200 specialist tobacconists in South Africa – representing 1,769 stores which directly employ 3,194 people – has indicated overwhelming opposition to the new Bill.
The proposed regulations include a complete ban on the display of all tobacco and related products across all retail channels, even in specialist tobacco stores – sparking concerns across the industry. The ban includes the display of cigarettes, cigars, e-cigarettes, vapes, hookah pipes and heat-not-burn devices. In the case of specialist tobacconists, tobacco and vaping are typically the only products they sell.
Clippa Sales Director, Alex Jacovides said while the Tobacco Bill created significant trouble for all tobacco products retailers, it is clear from the research into specialist tobacconists that proposing a total ban on displaying the only products they sell in their stores was an existential risk to their businesses. ‘’These are legal products that are only sold, by law, to people over the age of 18’’.
According to the survey, 98% of respondents, all small businesses operating across the country, disagreed with the display ban, with 99.5% saying it would severely impact their businesses, threaten their sustainability and place thousands of jobs at risk.
Additionally, 75% of respondents said the Bill would criminalise hard-working legal businesses, while 86% said it would damage the lives of employees who depended on small businesses, especially in these exceptionally tough economic times.
Diane Bravo, owner of specialist tobacco retailer, Casa Tabacs was reported as saying that a display ban at specialist tobacconists will force companies to close their doors, impacting the fiscus and, most importantly, jobs.
Some businesses warned that bans did not work and the government should have learnt this hard lesson during the Covid-19 pandemic when tobacco products were banned. Obviously, the ban did not work.
A total 96% of respondents believed that the display ban would have the same impact as the Covid-19 tobacco ban, which led to a massive increase in the sale of illicit tobacco products. The display ban would further entrench the illicit tobacco market.
The illicit trade’s market share currently stands at around 60% of the total tobacco market in South Africa. While it was high before the Covid-19 pandemic , the tobacco ban significantly increased the illicit trade’s market share to the point where it now far exceeds that of legal tobacco companies, according to Bravo.
“This alone should show that bans lead to unintended consequences. In this case, the ban will damage legal businesses while opening the floodgates for illicit traders.” This would pose a significant risk to South Africa’s fiscus.
Business Leadership South Africa estimated that the tobacco bans during the lockdown cost the government as much as R35 million a day in lost excise and other tax revenues. Brands distributor Clippa Sales warned that the new Bill would harm small businesses who only sold these products.
Tobacconists specialists have called for an exemption from the display ban, in line with international precedent where specialist tobacconists are exempted from such bans.
Almost all of the respondents agree that extreme laws based on recommendations from the World Health Organisation were often not appropriate in the South African context, which had specific and unique circumstances compared with the UK, the US or Switzerland for example.
The opponents are calling on the government to consider the economic impact of this Bill and urged the authorities to engage with the sector to find a balanced and sensible approach to the tobacco regulations in South Africa.
Regulations set out in the Tobacco Bill should also be based on scientific evidence, something a multinational tobacco company claims is not currently the case.
The tobacco company Philip Morris South Africa (PMSA), has labelled the Bill “irrational”, and says its current approach “lacks nuance and scientific justification”. It would also not advance public interest. The Portfolio Committee on Health should differentiate between the regulation of non-combusted alternatives and cigarettes.
Ulreich Tromp, Director of External Affairs Southern Africa at PMSA, says the Bill should include differing communication rules as well as different regulations for packaging, labelling and ingredients for the two types of tobacco products. This will ensure that adult smokers understand the differences and benefits of better alternatives versus continued smoking.
“We believe in an open and transparent dialogue between policymakers, legislators, health experts, society and industry about the future of tobacco regulation in the country.”
Amongst the issues raised in its written submissions on the Bill, the company highlighted the differences between non-combusted alternatives and cigarettes, stating that they should be regulated differently based on the different risk profiles of these products as supported by the scientific evidence. They also raised several other concerns regarding the Bill, which include protecting freedom of commercial speech to provide an opportunity for adult smokers to choose better alternatives to continued smoking.
“The current approach adopted in the Bill lacks nuance and scientific justification to the extent that it is irrational. The resultant proposed legislative mechanisms set out in the 2022 Bill will not advance the public interest,” Tromp said.
(Additional information sourced from Creamer media, IOL and Eye witness news).
