The Tobacco Bill will close more small business and destroy countless jobs

TOBACCO industry stakeholders said on Thursday, they support the need for regulation in the tobacco industry, but it must be based on reality and should not lead to job losses.

The tobacco industry stakeholders held a press briefing in Johannesburg on Thursday, as the Parliament’s portfolio committee on health invited public comments on the Tobacco Products and Electronic Delivery Systems Control Bill.

British American Tobacco SA (BATSA) said the bill would accelerate the destruction of the legal tobacco value chain and permanently entrench a dominant illicit trade, without reducing smoking.

BATSA general manager Johnny Moloto said: “The 2020 tobacco sales ban (during the Covid-19 lockdown), which South Africa’s courts declared unconstitutional, demonstrated the effects of prohibition as consumers were forced to experiment with brands they had never heard of before. Illicit trade skyrocketed".

Moloto said the market has still not recovered and the illicit trade now accounts for up to 70% of cigarettes sold in South Africa. That means up to 70% of all tobacco products are already sold outside the scope of the government’s existing tobacco control measures.

“It is beyond comprehension that the Department of Health wants to introduce measures like plain packaging and retail display bans that will simply incentivise remaining smokers of legal cigarettes to migrate to illicit products. These smokers will forever be beyond the reach of the government’s tobacco control measures, effectively handing the illicit market another gift-wrapped opportunity to grow.

“BAT South Africa supports the need for regulation and is committed to reducing the health impacts of its business by giving smokers a viable opportunity to migrate from cigarettes to less risky products,” he said.

Moloto said brands played an important role in consumer choice and many consumers remained willing to pay more for trusted brands for the quality confidence they provided.

"Removing unique brand identifiers through plain packaging would make price the primary consumer consideration, causing a shift to cheaper, predominantly illicit, options, and this would make smoking more affordable and likely increase consumption," he said.

Warren Dreyer, owner of a chain of 25 specialist tobacco stores called JJ Cale, which employs 95 people said: “If this Bill is passed, it will mean that as a specialist tobacconist, I will be banned from displaying the actual products that I sell.

"Worse is that if one of my team mistakenly leaves a packet of cigarettes or a vape on the counter, they would be contravening the law and go to jail for 10 years, and a hefty fine".

Dreyer said never before has the country been more desperate for economic stability, growth, and jobs.

"Worldwide it is recognised that small businesses are the engine of job creation and a growing economy. Sadly, here in South Africa, the odds are currently stacked against the ability of small businesses to flourish.

"Loadshedding is the most urgent challenge, along with the soaring cost of doing business, but it is the government’s policy and regulatory framework that is paralysing, instead of enabling, the growth of small businesses.”

Dreyer said: “My plea is that Parliament, the Portfolio Committee on Health, and the National Council of Provinces consider very carefully the impact this sort of blanket legislation will have on all sectors of industry and society, on our sustainability as small business owners, and on our ability to retain and create jobs.”

Limpopo Tobacco Processors, represented by François van der Merwe said: “We all agree that tobacco must be regulated. But any regulation needs to be realistic, workable, and based on economic and social reality to achieve the government’s objective of reducing consumption".

Van der Merwe said it was time the government got realistic about how tobacco should be regulated.

"It should go back to the drawing board and work on realistic and practical solutions that are based on the economic and social realities of the day – and stop opening up the South African economy to more and more mafia-type, tax-dodging criminal networks. We have enough of those already," he said.

Meanwhile, the Lesedi Black Business Forum (LBBF) said it would be requesting the Portfolio Committee on Health to extend the deadline for comments beyond August 4, 2023.

"Given the potential impact of the bill on ordinary South Africans and all types of businesses, it would be inappropriate for Parliament to rush the process of obtaining comments. Participative democracy should not be rushed, if it is to be meaningful, impactful, and empowering to citizens," it said.

The Forum said the bill has not been made available in any languages other than English, as many small business owners do not speak or read English at the same level as the technical English used in the draft legislation.

BUSINESS REPORT