Friday, 29 March, 2024
HomeMedico-LegalFita goes ahead with tobacco appeal despite unbanning

Fita goes ahead with tobacco appeal despite unbanning

The tobacco wars rumble as ban is lifted, say reports.
British American Tobacco SA (Batsa) has urged government to ratify the World Health Organisation's Illicit Trade Protocol now that the ban on cigarette sales has been lifted, in a bid to combat illicit trade it fears has taken root under the ban. Fin24 reports Batsa said it had lost a significant amount of market share under the sales ban, yet research had shown that most smokers had been able to purchase cigarettes. Illicit traders were cashing in, it said.

Batsa also charged in its statement that cigarette companies associated with the Fair-Trade Independent Tobacco Association (Fita) took over the tobacco market over the past five months, when the trade of tobacco products was banned – something Fita has strongly denied.

Batsa argued that ratifying the Illicit Trade Protocol would help eradicate the trade of illicit cigarettes and level the playing field for all market competitors by ensuring all cigarette producers are compliant. “Batsa made its call as the company confirmed comprehensive independent research that shows cigarette brands mainly associated with the Fita have completely taken over the market over the past five months of the sales ban,” the statement said.

Batsa said UCT's Research Unit on the Economics of Excisable Products found that from 23,000 respondents, 93% of all smokers were still able to purchase cigarettes during the lockdown and tobacco ban.

Professor Corné van Walbeek, who conducted the UCT research, found that Batsa took the largest knock due to the tobacco ban, but found that some retail outlets improperly sold properly obtained and taxed cigarettes out of their own stores during the lockdown.

Fita chair Sinenhlanhla Mnguni said the association rejected Batsa's accusations with contempt, calling them “another attempt to deflect attention from its well-documented shenanigans and to direct law enforcement agencies towards its competitors”.

He added, according to Fin24: “We also reject any assertions that Fita members have in any way benefited from the ban in the sale of cigarettes during the lockdown period.”

However, Mnguni did agree it was critical to maintain a fair market. Mnguni said it was incumbent on the state to level the playing field in the tobacco industry to give local employers and contributors to the economy a competitive and fair-trading environment.

 

SARS Commissioner Edward Kieswetter has noted it would take years to root out the corruption and illegal activities that have taken root in the past five months. Batsa says it remains committed to co-operating with SARS and law-enforcement authorities to address the illicit trade and ensure a speedy return to the legal and tax-compliant trade in tobacco products.

And, notes a Moneyweb report, despite the ban being lifted, the tobacco industry will continue with its legal battles – partly in fear of the government making a U-turn on its decision, and partly to establish where the law stands on the matter.

Batsa began legal proceedings in May against the government’s decision to extend the ban on tobacco sales during lockdown level three. While it has noted the state’s decision to move to lockdown level two, it says “legal clarity is needed.”

And Mnguni agrees, saying: “There still exists the possibility that we may shift up levels, under which levels the sale of cigarettes and tobacco-related products are currently banned in terms of the regulations as they currently stand. Further, the matter raises novel issues of law and fact, and we are of the view that it is in the public interest that the provisions of the Disaster Management Act be tested in the higher courts.”

 

Fita said that it is to pursue its appeal against a ruling upholding the COVID-19 tobacco ban despite government's decision this last weekend to revoke the measure after nearly five months. “We will definitely proceed with the appeal,” Fita chair Sinenhlanhla Mnguni said, according to a report on the IoL site.

On Friday (14 August), the Supreme Court of Appeal (SCA) granted Fita leave to appeal a ruling on 26 June by the Gauteng High Court (Pretoria) that held Co-operative Governance Minister Nkosazana Dlamini-Zuma had acted reasonably with a view to saving lives when she gazetted the ban under the Disaster Management Act. The SCA also set aside a cost order granted against Fita when it unsuccessfully petitioned the Pretoria court for leave to appeal before turning to the SCA. However, it ruled that should Fita choose not to proceed with the appeal, it would carry the costs of the matter.

Mnguni welcomed the decision and said while a trial date had yet to be set, the court had indicated that the matter would be expedited. The government faces a similar legal challenge from the wine industry.

The report says 120 wine farms, led by the non-profit Southern African Agri Initiative (Saai), have applied to the Gauteng High Court to declare the alcohol ban unlawful. Though the matter has now become moot, Saai head Francois Rossouw has also signalled that the case would continue despite an eventual lifting of the prohibition and a loss of urgency.

“We have to go ahead. What if there’s a surge in November and they ban alcohol again? We’ve got to put a peg in the ground against this sort of arbitrary and irrational action,” he was reported as telling the Financial Mail.

 

[link url="https://www.news24.com/fin24/companies/industrial/tensions-loom-between-tobacco-producers-and-ban-lifts-20200817"]Full Fin24 report[/link]

 

[link url="https://www.moneyweb.co.za/news/south-africa/illicit-tobacco-trade-has-helped-itself-to-local-market-share/"]Full Moneyweb report[/link]

 

[link url="https://www.iol.co.za/news/politics/fita-to-persist-with-court-action-on-tobacco-ban–1922f31d-03b9-4c22-aa83-33d0e719095d"]Full report on the IoL site[/link]

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