[imagesource: here]
Welcome to alert level 4 of the national lockdown.
This past weekend, people were finally allowed to go for a walk or a jog, and buy things that were formerly prohibited, like art supplies or educational materials.
The one thing that a significant number of South Africans were anticipating was a few puffs of a legal cigarette after President Ramaphosa announced that the tobacco ban would be lifted. Instead, Minister Nkosazana Dlamini-Zuma stepped in to announce that the ban would stay in place.
Everyone who smoked the last of their stock with wild abandon in anticipation of Friday, was left nicotine deprived and rather angry about it.
After a few days of silence and considerable public outrage, Ramaphosa addressed Dlamini-Zuma’s rollback on the tobacco ban in his weekly newsletter, published in full by News24.
Here’s the president’s response to the reinstatement of the ban:
There has been much public comment on government’s decision to extend the prohibition on the sale of tobacco products into Level 4. A decision like this is bound to be controversial, but it is wrong to suggest that there are ministers or a president doing and saying whatever they want on this matter.
On 23 April, I announced that cigarette sales would be permitted during Level 4. This was based on the view of the National Coronavirus Command Council (NCCC), and which was contained in the draft framework that was published for consultation.
After careful consideration and discussion, the NCCC reconsidered its position on tobacco. As a result, the regulations ratified by Cabinet and announced by Minister Nkosazana Dlamini-Zuma on 29 April extended the prohibition.
This was a collective decision and the public statements by both myself and the minister were done on behalf of, and mandated by, the collective I lead.
In short, he says the decision was taken as a collective, and he was not blindsided by Dlamini-Zuma.
The government is now facing legal action from British American Tobacco South Africa (BATSA) which imposed a deadline for the lifting of the ban (10AM on Monday, May 4). The Fair Trade Independent Tobacco Association (FITA) has also threatened legal action.
We’ll know in due course whether or not BATSA has issued its papers.
The argument laid out by BATSA is that the ban on tobacco is unreasonable for a number of reasons, not least of which the loss of tax revenue when the country needs it the most. The government is countering this by maintaining that depriving South Africans of tobacco products is in the best interests of the health of its citizens.
Today, a majority of the world’s estimated 1,1 billion smokers live in low and middle-income nations, according to The Telegraph.
Most tobacco farming has also shifted from high-income countries in Europe and North America to markets in Africa, Asia and South America. However, cigarette factories and sales around the world have come under pressure from government-mandated shutdowns due to the global coronavirus outbreak. Big brands have also been hit by reduced duty-free sales as empty airports take their toll.
Erik Bloomquist, an independent consultant and former industry analyst, talks about the current situation in South Africa:
“I was surprised that South Africa had decided to continue with its ban on cigarette sales,” says Bloomquist, who adds that this would do little to stop people from smoking or buying cigarettes, particularly in the poorer townships.
“It won’t change behaviour,” he says. “And the effect of the ban on tax revenues – in a country that had already been struggling in this regard – could be disastrous. The country will ultimately miss out on much-needed taxes.”
India has also banned the sale of cigarettes, but doubts are growing over this approach.
“The lockdown is not a good time to begin a ban on smoking and the move will have a lot of unintended consequences,” says Bloomquist. “It simply entrenches and facilitates a shift to illicit products.”
Illegal cigarettes today account for roughly 33% of all cigarettes sold in South Africa. Such cigarettes are particularly prominent in the informal trade, where they make up an astounding 42% of the informal market.
Those numbers have been on the rise since the lockdown began, as SARS loses what could amount to billions in tax revenue.
With court cases looming, all that’s left to do is wait to see how this all pans out.
[source:news24]
