Proposed smoking regulations ignore 'illicit trade crisis', says consumer body

South Africa’s proposed smoking regulations ignore the country’s “illicit trade crisis”, the Consumer Goods Council of South Africa (CGCSA) said on Tuesday.

In its parliamentary submission to the portfolio committee on health, CGCSA said the Tobacco Products and Electronic Delivery Systems Control Bill was a “plug-and-play” import of foreign models that completely disregard the illegal production, smuggling, distribution and sale of tobacco products in the country.

It said while the council, which represents more than 9,000 South African companies, supported evidence-based tobacco control to advance public health, it was concerned about the “unintended consequences, particularly economic harm and the likely expansion of the illicit tobacco trade, which is estimated to cost South Africa at least R18bn per annum”.

CGCSA CEO Zinhle Tyikwe said the bill adopted a one-size-fits-all approach which did not account for South Africa's unique context. An illicit tobacco market now accounted for an estimated 60—70% of sales.

“We are seeing shortcomings in the bill, particularly where there is a ‘plug-and-play’ from other foreign models that may be similar to South Africa but are not South African. Here we are in the middle of an illicit trade crisis, not just in tobacco but also in pharmaceuticals, fraud and liquor. As an industry, we deal with issues that are critical, because if people consume alcohol, food or pharmaceutical medicines that are illicit, there is a real risk that people will die. We take our work seriously,” said Tyikwe

“The bill also draws an unfair distinction between the formal and informal sectors. The informal sector is not held to the same compliance standards and that imbalance is not fair. We ask that this gap be closed by ensuring that all businesses, formal or informal, are required to hold the necessary licences, registrations and compliance documentation.”

CGCSA proposed that separate consultative legislative processes should continue.

“Illicit trade in tobacco has increased by between 60% and 70%, and we are demanding urgent prioritisation of this issue, because what we are witnessing is a full-blown crisis,” Tyikwe said.

She said the value chain faced mounting pressure from the bill.

“While it aims to improve public health outcomes through stronger tobacco control, it also carries implications for the entire tobacco and nicotine value chain. The total farming yields have declined, worsened by the 2020 lockdown, which reduced employment from 11,000 to 6,000 workers, who are supporting at least 80,000 dependents.

“These farmers contributing to the national fiscal without government aid exemplifies the value chain's fragility. Retailers must also reconfigure points-of-sales at significant costs to conceal products, while specialists, tobacconists and vaping stores face customer loss. Informal traders, such as spaza shops, lack the infrastructure to comply, facing criminalisation and exclusion from legal trade.”

CGCSA legal, regulatory and sustainability executive Neo Momodu said the statement constantly being made was that business wanted to make a profit.

“If business doesn’t make profit, there won’t be investment, there won’t be jobs, and there won’t be growth of the economy. We had three budgets this year simply because we're trying to balance the dynamics of ensuring that this country remains and becomes a place where we’re able to keep our debts and spending under control,” she said.

“It is important the role of business is acknowledged. Business employs more than government does, more than the NGO sector. Therefore, it is important that we create a regulatory environment that enables business to thrive, so they're able to give back to communities and carry on with their jobs.”

Momodu suggested parliament invite scientists to present evidence on approaches to combustible and non-combustible products, similar to business presentations at Nedlac.

“We need to have evidence that comes from credible researchers, credible science people, who can be called to parliament to give objective evidence about some of the causes of the things and the ills that we have, in terms of how they affect society.”

She added that the government had to evolve with the world.

“The world is an evolving place. We did not, in 1997, for example, have vaping. It is important, that as regulators we keep in touch with the times, so that we continuously design legislation which is aligned to the current landscape.”

TimesLIVE