Tobacco industry ‘vindicated’ by High Court ruling on smoking ban

Tobacco industry ‘vindicated’ by High Court ruling on smoking ban

British American Tobacco South Africa (BATSA) says the tobacco industry has been vindicated by the decision to nullify government's ban on tobacco products during the Covid-19 pandemic.  

Cigarettes in ashtray

On Friday, the Western Cape High Court ruled that regulation 45 of the Disaster Management Act was unconstitutional.  

The regulation stubbed cigarette sales during the country's hard lockdown, costing the industry a fortune.  

The ruling was in favour of British American Tobacco South Africa (BATSA), and others, in their case against Cooperative Governance and Traditional Affairs minister Nkosazana Dlamini-Zuma, President Cyril Ramaphosa and the National Coronavirus Command Council.  

BATSA’s Johnny Moloto has welcomed the decision.   

“The five-month ban on tobacco and vapour products sales was ill-considered, unlawful and has worsened the illicit trade in cigarettes and vapour products in the country. South Africa has the largest illicit tobacco market in the world,” says Moloto.   


Fair-Trade Independent Tobacco Association (Fita) chairperson Sinenhlanhla Mnguni believes it's a win for the whole industry.  

"We're happy with the decision that was arrived at by the full bench of the Western Cape High Court."  

Despite the industry's victory, Mnguni claims the ban did irreparable damage.  

"It hampered us quite significantly and for us to recover that, not only from a business point of view but also from the point of view that we lost quite a substantial amount of market share to the illicit economy.  

"We saw during lockdown just how much of an effect the state of our borders has on our particular industry," he says.  

"It's going to be some time before the industry recovers, if at all."  

He says the ban on tobacco sales has shifted the dynamics of the industry.  

"What we're also seeing is that the market has become way more competitive post the lifting of the ban and that's of course a result of people being exposed to a number of different cigarettes, people were in essence smoking what they could get their hands on."  

Mnguni adds government is yet to deal effectively with the country's seemingly porous borders.  

Last week the University of Cape Town released the third survey on smoking trends during the lockdown.  

The report found cigarette prices remained higher, even after the ban was lifted.  

It also affirms Mnguni's assertion that smaller players and the illicit industry racked up a reasonable market share following the ban.   

The report further makes a clarion call to National Treasury to increase excise tax to reduce tobacco consumption and increase government's revenue.    

But Mnguni believes this would be a “suicide mission”.  

"There is no way that government would be justified in imposing a substantial increase in excise tax. We know yearly there is a negligible amount that's added on which has always been done and we're fine with that but when you add a substantial increase, you'll be writing the obituary of the legitimate tobacco industry because what you're going to see is that people are going to be flooding the market with cigarettes from our neighbouring countries where the taxes are much lower."  

Listen to Mnguni below:  

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