British American Tobacco (BAT), the country’s largest tobacco company, has dropped its plans to go to court to force the government to reverse its decision to ban cigarette sales during level 4 of the country’s Covid-19 lockdown.
The decision was communicated by the company on Wednesday morning after days of silence.
In the statement, the company said it took the decision after receiving a formal response to a letter it sent to the national command council on 30 April 2020. The letter singled out Cogta Minister Dr Nkosazana Dlamini Zuma, accusing her of being behind the decision to ban the sale. BAT said the decision was bizarre.
“Having considered the response from the government and noting President Cyril Ramaphosa’s public statement of Monday May 4, as a business, we have taken the decision not to pursue legal action at this stage but, instead, to pursue further discussions with government on the formulation and application of the regulations under the Covid-19 lockdown.
“We are convinced that by working together we can find a better solution that works for all South Africans and removes the threat of criminal sanction from 11 million tobacco consumers in the country,” BAT said in the statement.
However, BAT, just like its competitors under the umbrella of Fair Trade Independent Tobacco Association (FITA), continued to raise concerns that while the ban is still in place, illicit tobacco trade is thriving.
“The significant rise in the illicit trade of tobacco during the lockdown continues to be of great concern and threatens the livelihood of many who depend on legitimate businesses to sustain themselves.”
The statement on Tuesday from Commissioner Edward Kieswetter that Sars has “clear evidence” the illicit economy is “thriving” and that there could be a shortfall of R285 billion in tax revenues this year lays bare the challenge facing the government, businesses and all South Africans.
“We urge government to consider an approach that will address their concerns while also ensuring legitimate businesses can contribute to this country’s economy and future growth. The illicit traders are the only beneficiaries of the ban on tobacco sales,” the company lamented.”
The company added that while it supports the government in its mission to prevent the further spread of the virus, it believes that it is vital that there should be a renewed and stronger effort under level 4 to permanently close down the illegal supply lines of tobacco that has been established during the lockdown.
“Reopening the legal, taxed and regulated tobacco market must be part of the solution. Cigarettes should only be sold in established retail outlets where the government’s correct social distancing guidelines can be enforced. At the moment, smokers are putting themselves and their households at further risk of the virus by moving around in search of cigarettes being sold by illegal traders.”
Meanwhile, the government has until Friday to file responding papers to FITA’s court application which seeks to reverse the ban on cigarette and tobacco sales. In its papers, FITA argued that the decision was not well thought out. Government has indicated that it will oppose the application.