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Six things that concern the tobacco industry about the new draft bill

May 18 2018 07:42
Lameez Omarjee

The Control of Tobacco Products and Electronic Delivery Systems Bill was recently gazetted.

The aim of the bill is to provide control over smoking, regulate the sale and advertising of tobacco products and electronic delivery systems or devices, regulate the packaging and appearance of these products and standardise their packaging.

The bill also seeks to provide standards for the manufacturing and exporting of these products, prohibit their sale through vending machines and prohibit the free distribution and sale of the products to those under the age of 18.

However, industry bodies the Tobacco Institute of Southern Africa (TISA) and the South African Informal Traders Association (SAITA) have separately raised concerns over some of the provisions.

In a statement, TISA took particular aim at the Department of Planning, Monitoring and Evaluation for not engaging with affected stakeholders such as farmers, manufacturers, retailers and the hospitality industry in drawing up the bill.

SAITA also said in a statement that the new bill was developed “without any regard for realities of informal trade”. SAITA wants informal traders to be exempted.

“I am of the view that this is probably, if it stays like this, the most controversial and extreme tobacco bill in the world,” TISA chairperson Francois van der Merwe told Fin24 by phone. “It certainly is a ‘cut and paste’ job from certain first world countries, it does not take into account the realities of SA.”

Six causes for concern

Concerns raised by the bodies over provisions include:

1. The banning of tobacco product displays in all formal and informal retail and wholesale outlets. The draft bill sets out provisions that prevent the advertising or promotion of products, as well as information that can be communicated about the product

2. Banning the sale of tobacco products through vending machines. Van der Merwe said banning vending machines would wipe out an entire industry which makes a contribution to the country’s economy.

3. A ban on indoor smoking. The bill bans smoking in an enclosed public place or workplace, and prescribes different scenarios in which smoking in an enclosed space is prohibited.

According to van der Merwe, SA already has good regulation in this regard. Businesses have to have 25% of their establishments cornered off or enclosed for smokers. Van der Merwe explained that the provisions are impractical and that some businesses, such as taverns and shebeens which have spent money to comply with legislation in setting up enclosed smoking spaces, are complaining that they may have to break down these structures.

4. Restrictions on outdoor smoking areas.

5. Plain or standardised packaging and removal of branding of tobacco products. The bill prescribes how products should be packaged. According to van der Merwe, it has not been proven that plain packaging can reduce consumption, but rather that it has led to an increase in illicit trade.

He argued that plain packaging it standardised packaging and branding commoditises the product which makes for a “counterfeiters paradise” because no brand elements are on packs.

6. Regulation of e-cigarettes and other electronic products. The bill prescribes how electronic products should be packaged, among other things.

Boon for illicit tobacco trade?

Van der Merwe warned that the “extreme” tobacco legislation will have the adverse effect of contributing to illicit tobacco trade.

“The government’s failure to prioritise the combating of the illicit trade in cigarettes will directly undermine the Department of Health’s and indeed the country’s developmental objectives,” he said. “TISA urges that the illicit trade problem receive the highest priority from Cabinet and government as a whole, before any new and highly controversial legislation is considered.”

“Our view remains fix illicit first,” said van der Merwe. He explained that there could be 20 bills, but the health objectives of the minister will be undermined by illicit products that keep flooding the market. These cheap products are accessible to children, the vulnerable and the poor, he said.

SAITA also expressed concerns on the impact of the legislation on informal traders whose livelihoods depend on the sale of tobacco products.

“If you are a hawker, informal trader or spaza shop owner this ban will hit you hard,” said SAITA acting president Rosheda Muller.

“We estimate that about one-third of the average informal traders’ income comes from cigarette sales. These are people who already struggle to make a living. If their cigarette market is taken away, they may be driven to a life of crime,” Muller warned.

Muller weighed in on the ban of displays, indicating that informal traders do not have the infrastructure to “hide” the cigarettes they are selling.

“If you can’t see that a trader sells cigarettes, and more importantly, your brand of cigarettes, you will just walk past to another seller.”

Muller echoed Van der Merwe’s views that the legislation would drive illicit trade. She spoke specifically to the provision of plain packaging

“The Department of Health say they will address illicit trade by having identifying codes on cigarette packs which will be scanned at point of sale. However, the informal trade won’t be able to use scanners as they don’t have the facilities or space for them and many of the traders are roving vendors.”

Although SAITA supports the Department of Health’s goal to stop people smoking, Muller said the solution is not to hide products, but rather education.

“Go into the schools and show our kids what smoking does to you. There are alternatives and we will be sharing these as part of our formal submission to the Department of Health,” she said.

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tobacco  |  cigarettes  |  law  |  illicit financial flows
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