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Stub out South Africa's proposed Tobacco Bill

The debate on the health effects of tobacco products and the socio-economic impact of the proposed legislation and illicit trade is an important one. But for <strong>South Africa</strong>, faced with high levels of unemployment, the pursuit of health objectives should not be at the expense of jobs, writes Katishi Masemola, general secretary of the Food and Allied Workers Union, in <strong><em>Pretoria News</em></strong>.

In his opinion piece in Pretoria News on August 15, Health Minister Aaron Motsoaledi makes insinuations that workers in the tobacco value-chain and their union Fawu (Food and Allied Workers' Union) are being lied to on the impact of job losses but goes on to argue that health benefits cannot be juxtaposed with job losses.

He goes on to suggest that there is no illicit trade in cigarettes and that tobacco laws, which were amended during the days of then health minister Nkosazana Dlamini Zuma, did not result in the growth of the illicit trade market. But he is yet to contest the findings of a study by market research firm Ipsos, which found that the penetration of illicit tobacco products in the informal sector had reached alarming levels and R7billion is lost to the fiscus due to illicit trade.

There are two issues about tobacco that Motsoaledi should appreciate. First, the amendments to tobacco legislation contain draconian provisions and even those that appear to have been made in good faith are not practical.

Second, the illicit trade of cigarettes exists and, due to this, the numbers of people who smoke may have not gone down, despite the high levels of “sin” taxes to the legitimate sector.

The proposed Control of Tobacco Products and Electronic Delivery Systems Bill, aimed at replacing the Tobacco Control Act, introduces regulations that will ban smoking in all public spaces, including outdoors within 10m of another person.

The bill will also remove branding from cigarette packs, put a ban on the display of tobacco products by retailers and introduce jail time for those found to be in contravention of the new act.

On the proposed amendments, the minister should note the following:

First, it is a fact that the 10m distance will negatively affect taverns as smokers may have to literally go to the outskirts of the township to smoke.

On the contrary, the provision that allows a non-smoking passenger in a car to tolerate, rather suffer inhalation of, smoking just because he or she is older than 12 years defeats the purpose of saving non-smokers.

Second, the ban on the display of tobacco products will severely hit the pockets of traders. This will mean consumers would endure the difficulty of having to enquire about the sale of tobacco products from the traders.

On the bill's intent to introduce plain packaging, we believe that putting graphic content on cigarette packs to show the health effects of smoking would be the most effective way of deterring non-smokers from taking up smoke and “incentivising” smokers to quit. Plain packaging will only translate to job losses for those responsible for branding and create further opportunity for illicit traders to flourish as consumers will have the brand awareness aspect taken away from them.

On illicit trade, the minister ought to be honest on the proliferation of sales of illegally manufactured cigarettes in informal trading spaces in villages and townships. In fact, the minister must explain why, if there is no illicit trade, a packet of 20 cigarettes can be sold for as little as R10, as I established in Meadowlands, Soweto, last weekend?

A legitimate cigarette packet has a retail price that includes VAT and excise duty tax that amounts to R17.85 and according to the Ipsos study, any packet that retails below this is deemed illicit.

The minister may have to contest the Ipsos research report which suggests that up to R7bn is lost in revenue to the fiscus due to unpaid taxes on 2billion sticks estimated to be illicitly traded. This is because illicit trade presupposes under-declaring volumes, paying little tax and selling at below-tax prices.

Having dealt with both the tobacco amendment and illicit trade, we call on the ministry and government to meaningfully engage on both issues and appreciate that Fawu's clarion call is based on jobs security for citizens, health to the nation and revenue to the fiscus.

Fawu will not encourage people to take up smoking. In fact, to the contrary, it encourages them to quit. We will do so mindful that tobacco is still a legal product for consumption.

However, Fawu will not stand idle when inappropriate policies are introduced and when illicit trade is tolerated.

In a country faced with treble crises of 38% unemployment rate, 40% poverty rate and world's widest inequality gap, we consider one job loss to be one too many and cannot pursue “luxurious” policies or laws meant for developed nations. We call on the SA Revenue Service to clamp down on illicit traders by enforcing compliance hence our protest march to the Treasury to ask the minister to ensure this happens.

[link url=""]Stub out South Africa's proposed Tobacco Bill[/link]

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