The government’s plans for stricter tobacco laws are fundamentally flawed and will fuel the illicit cigarette trade while doing little to curb smoking, an industry association told parliament on Thursday.
The SA Tobacco Transformation Alliance (SATTA), which represents tobacco farmers, processors and manufacturers, called on MPs to either send the Tobacco Products and Electronic Delivery Systems Control Bill back to the health department for redrafting or substantially amend its provisions. The bill seeks to tighten tobacco controls and, for the first time, regulate vapes and other tobacco-free nicotine products.
The portfolio committee on health has completed public hearings in all nine provinces and is now taking oral submissions on the bill, the last stage of public consultation before it is expected to begin deliberating on the contested legislation.
Introducing further restrictions on the advertising and sale of cigarettes before the illicit trade was stamped out would decimate what was left of the legal industry and lead to extensive job losses, said SATTA spokesperson Francois van der Merwe.
Illicit cigarette manufacturers do not pay excise tax to the SA Revenue Service (Sars), enabling them to undercut the prices charged by companies that are compliant.
“Get this right, and public health, as well as economic stability and the jobs in the value chain will be protected. Get it wrong, and criminals win while legal business, tax revenue, public health objectives are further decimated,” he said.
More than three-quarters of SA shops that sell cigarettes are offering products that cost less than the minimum tax threshold, according to a recent Ipsos survey commissioned by SATTA member British American Tobacco (BAT). The illicit trade costs Sars R28bn a year, according to BAT.
Van der Merwe said the bill was so restrictive it would strengthen the hand of criminal networks. For example, the plan to introduce plain packaging devoid of cigarette manufacturers’ branding would make it easier for criminals to manufacture and sell counterfeit products, he said.
The bill also proposes introducing graphic health warnings and plain packaging for all tobacco and nicotine-containing products, including e-cigarettes. It also proposes a ban on the sale of single cigarettes, prohibits vending machines and point of sale advertising, and introduces further restrictions on smoking in public places.
The proposed ban on retail displays was an inappropriate “cut and paste” from developed countries that failed to take into account that 80% of cigarette sales are in the informal sector, said Van der Merwe.
Small business, spaza shops and street vendors display their wares on tables, and banning the display of cigarettes was impractical and unenforceable.
It would criminalise “survival entrepreneurs”, and push sales underground, he said. The proposed prohibition on the sale of single cigarettes was equally problematic, and would adversely affect small businesses, he added.
SA needed better enforcement of the current limits on smoking in public places, not further restrictions, Van der Merwe said.
He urged MPs to consider differentiated regulation for tobacco-free products such vapes, arguing they were less harmful and should therefore not be restricted in the same manner as cigarettes.
Business had made these and other suggestions at Nedlac, but the proposals had been rejected by the health department, he said.
SATTA challenged the bill’s proposals for a 15-member monitoring committee appointed by the health minister, saying it gave too much power to the minister and should be subjected to parliamentary oversight.
Section 13 (3) of the bill prohibits and tobacco or vaping industry participating in the committee, in line with the World Health Organisation’s Framework Convention on Tobacco Control, which requires countries to protect tobacco policy from industry interference.
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