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Three months after the controversial tobacco sale ban was lifted, the local industry is still struggling to compete with the glut of illicit products on the market.
Last week, the Western Cape Superior Court upheld British American Tobacco SA’s (BAT SA) challenge to the ban and declared it unconstitutional and invalid. But it may be too little, too late.
The ban was instituted with the nationwide shutdown in March and lasted for five months before it was finally lifted in August.
BAT SA in a statement over the weekend welcomed the court’s findings, but highlighted the devastating impact that the ban, and the boom in illicit trade it brought with it, continued to have on local industry, reiterating its call to South Africa to ratify the World Cup. Protocol of the Health Organization (WHO) to eliminate illicit tobacco trade.
“The five-month ban on the sale of tobacco and vapor products was poorly regarded, illegal and has worsened the illicit trade in cigarettes and vapor products in the country,” he said in the statement.
And the Fair Trade Independent Tobacco Association (FITA) echoed these sentiments on Monday.
FITA launched its own legal challenge to the ban in North Gauteng Superior Court earlier this year, but it was unsuccessful.
Sinenhlanhla Mnguni, who chairs the association, said that he and his team were still studying the BAT SA ruling and considering the possible implications it could have for their case.
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Meanwhile, however, Mnguni also voiced serious concerns about the ongoing proliferation of illicit trade.
“We are seeing the effects of an inability to trade for five months now even more than during prohibition,” he said, “We know that illicit trade was rife before the shutdown. But now it is even greater in terms of the participation and privilege enjoyed in the market by those who operate in that space ”.
Mnguni described the growth of illicit trade under the ban as “exponential.”
“With many criminal syndicates involved in other criminal activities that are drawn to this practice as a result of the apparent relative ease of smuggling cigarettes across our porous borders,” he added.
He noted a recent visit by the Parliament’s joint standing defense committee and the defense portfolio committee and military veterans to three border sites, during which it emerged that “lethal threats” were on the rise, with organized crime syndicates apparently “well-equipped. with weapons and intelligence ”.
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Mnguni said this was “a clear indication” of how lucrative the illicit market had become.
“On many occasions we had warned the government that prolonging the irrational ban on cigarettes would only serve to encourage these criminal elements who have now clearly increased their resources and networks,” he said.
“Of course, this has a significant impact on legitimate tobacco industry players and those they employ throughout the value chain, as it is virtually impossible to compete with these unions who are flooding the South African market with their smuggling. ”.
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