Tobacco industry calls on Parliament to stop processing new tobacco law and send it to Nedlac

SATTA — which represents all stakeholders in the legal production and manufacture of tobacco products – made the call in response to a request from the Portfolio Committee on Health for public comments on the draft legislation.

“Consideration of the Bill in its current form is premature and uninformed, and we urge Parliament to reject it,” says SATTA in its submission, which has been sent to the Portfolio Committee as part of its public consultation process. “Instead, the draft legislation should immediately be sent back to Nedlac for serious assessment and input by all the social partners. Only then should it go before Parliament.”

SATTA outlines two fundamental flaws surrounding the legislation:

• The consultative process that was supposed to have been followed by the Department of Health before submitting it to Cabinet and Parliament; and
• The potential impact of the legislation on hundreds of thousands of people

In its submission, SATTA states: “The Department of Health has stated publicly that there has been ‘extensive consultation’ with all stakeholders. This is simply not true: the discussions that have taken place with the Department have been irregular and do not represent true consultation. In addition, Nedlac – a statutory body where draft legislation of this nature is supposed to be discussed – has been bypassed, and in the process so has any attempt at a genuine social compact around this legislation.

“Nedlac needs to undertake an independent socio-economic impact assessment before the Bill is considered by Parliament. The circumstances in which the tobacco industry finds itself should be fully and independently researched so that the legislation is based on a true understanding of the dynamics – in particular, the mushrooming of the illicit sector. Only then can informed decisions can be made on effective regulation of the sector.”

SATTA believes the current legislation around the production, manufacture and consumption of tobacco products is more than sufficient to address South Africa’s health needs. But the existing legislation is not being adequately enforced, says SATTA, and government and other stakeholders should first focus on that before any consideration is given to new laws.

In its submission, SATTA points out that the illicit tobacco sector – which it calls “an organised criminal network” – has almost completely captured the tobacco market, and the new legislation would effectively hand over the rest of the market to the criminals.

“The market share of ‘legal’ cigarettes has dropped to less than 30%. The impact on employment in our sector has been devastating: Today, there are only 10 emerging tobacco farmers, down 92% from 2019 when there were 125. South Africa also has less than 155 commercial tobacco farmers — 21% fewer than the 197 it had in 2019.

“The reason for the collapse in tobacco farming is simple: Illegal trade in tobacco products is stealing the market and destroying an entire sector of the economy.

“The disappearance of 157 tobacco farmers, the retrenchment of thousands of tobacco workers and the halving of the sector’s contribution to the national fiscus can all be traced to lower demand for legal cigarettes.”

SATTA says there can be no doubting that the measures proposed in the Bill will further entrench the illegal trade while inflicting more harm on legitimate growers, processors, manufacturers, distributors and retailers of tobacco products.

“We have no hesitation in saying that the new Bill will worsen public health, destroy businesses and jobs, harm the fiscus and the economy and further tarnish South Africa’s international reputation; and it will do this by fueling what is already one of the world’s biggest illicit tobacco markets.

“The only beneficiaries of the Bill will be the wealthy criminals behind the illegal trade; they will scoff at the new measures, just as they have ignored so many previous laws. But they will also capitalise on them.”

In SATTA’s view, the current Bill “is a fundamental step backwards in the arena of tobacco control. It is among the most draconian in the world – if not the most draconian – and should not even be considered in its current form”.

Issued by:
Zacharia Motsumi
Spokesperson for SATTA
Mobile: 083 216 8842