Last month, the Consumer Goods Council of South Africa (CGCSA) complained about the country's proposed smoking regulations.
The bill — described in some quarters as draconian — aims to regulate the smoking of cigarettes and electronic tobacco delivery systems (such as e-cigarettes, nicotine pouches and vapes); ban the display of cigarettes at point of sale; curb advertising; prohibit the sale of tobacco products to children; standardise cigarette packages; and ban the sale of tobacco and non-tobacco products through vending machines.
However, in its parliamentary submission to the portfolio committee on health, the CGCSA said the contentious Tobacco Products and Electronic Delivery Systems Control Bill was a “plug-and-play” import of foreign models that completely disregarded the illegal production, smuggling, distribution and sale of tobacco products in South Africa.
The council — speaking for more than 9,000 South African companies — and which supports evidence-based tobacco control to advance public health, is concerned about the “unintended consequences, particularly economic harm and the likely expansion of the illicit tobacco trade, which they estimated to cost South Africa at least R18bn per annum”.
CGCSA CEO Zinhle Tyikwe says the illicit trade crisis is endemic to every facet of society, from pharmaceuticals to liquor and food to fuel, with fatal consequences as evidenced by last year’s tragic deaths of dozens of children from unsafe food.
A major aspect of their gripe is the bill doesn’t take into account the burgeoning illicit tobacco market, and instead focuses merely on harm and penalising the formal sector.
Agri SA said this issue is a death knell for tobacco farmers, citing a drop in production by about 50% in five years. They blame illicit trade for eating away at their market and say the government has unfairly targeted only them in their crosshairs.
They are advocating for the government to tighten the noose on the informal sector, which they say is not held to the same compliance standards, and that imbalance is unfair. There is no doubt the burden translates to thousands of preventable deaths and a strained healthcare system.
The multibillion-dollar global tobacco industry is not new to the game of diversionary tactics to shift attention away from their bottom line, with multiple attacks on the bill including criticism of stakeholders and differentiated legislation for vapes and e-cigarettes. They also question the science and evidence of tobacco harm and are critical of attempts to shield youth from the addiction.
There is no doubt the industry on the whole is a cancer eating at the very fabric of South African society
However, a new report by independent research house Ipsos shows that 76.7%, nearly triple the 27.4% seen in 2022, of South African retailers are now selling cigarettes below the minimum tax threshold.
Some stores are selling packs of 20 for just R5, they claim.
The study shows the illicit tobacco trade is “a home-grown problem” as locally manufactured brands flood the market, and one of the biggest manufacturers is Gold Leaf Tobacco Company, which was placed under curatorship by Sars in 2022 due to its alleged involvement in the illicit tobacco trade and tax noncompliance.
A number of organisations including Business Unity South Africa say the situation blew up during Covid-19 when the government banned cigarettes. By the time the ban was lifted illicit trade in tobacco and other industries was more entrenched than ever.
British American Tobacco South Africa (Batsa), which commissioned the study, said R28bn in annual tax revenue was lost to illicit trade, enough to exceed Sars’ entire additional collection target of R20bn.
There is no doubt the industry on the whole is a cancer eating at the very fabric of South African society.
The government needs to act decisively to root out illicit trade. Equally, the harm-reduction strategies need to be considered from a scientifically backed approach to bring about a solution that will have a lasting impact on the country's public health landscape.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.