Tobacco association brings urgent application to lift cigarette ban

Fita appeals ruling to lift the ban on the sale of cigarettes. Image: Moneyweb

State power has been expanded, but does the degree to which it’s being exercised violate government’s constitutional obligation to behave with legality?

In the first of what looks like a slew of cases challenging aspects of the Covid-19 lockdown in South Africa, the Fair-Trade Independent Tobacco Association (Fita) is hauling government to court on an urgent basis to have the ban on the sale of cigarettes lifted.

Papers were served on Monday to President Cyril Ramaphosa and Minister of Cooperative Governance and Traditional Affairs Nkosazana Dlamini-Zuma.

Normally fratricidal tobacco manufacturers have parked their differences to take on government over what is a business-threatening shutdown. British American Tobacco (BAT) last week sent a letter to Dlamini-Zuma demanding that she lift the ban, failing which it would bring an urgent application before the court.

Fita, of which BAT is not a member, beat it to the punch. It wants the court to lift the ban, and for government to account to all South Africans on how it came to the decision to impose the ban in the first place.

It’s also asking the court for a “declarator” that the export of tobacco products and cigarettes isn’t prohibited, and that cigarette manufacturing can resume.

Fita says the previous Level 5 lockdown did not specifically ban cigarette sales, but that manufacturers and retailers had buckled under threats and contradictory statements from various ministers and law enforcement officials, and had stopped either manufacturing or selling tobacco products.

Ramaphosa announced the lifting of the cigarette ban in April, but this was countermanded by Dlamini-Zuma a week later.

Fita says the ban “directly affects the freedoms previously enjoyed under law by approximately 11 million cigarette smokers and tobacco users in South Africa,” as well as their physical and mental wellbeing.

Tax Justice South Africa estimates that the fiscus has lost about R1.5 billion due to the ban, while fostering a rampant illicit trade in cigarettes.

Cigarettes are reported to be pouring across the borders with relative ease from Zimbabwe and Mozambique.

In a letter attached to the Fita application, Gold Leaf Tobacco CEO Ebrahim Adamjee points out that the company paid R437 million in excise and R60 million in value-added tax (Vat) over April and May 2019.

Two-month loss to SA of R519m from one manufacturer

Because the company has been shut down, the fiscus will lose out on R457 million in excise and R62 million in Vat for the same months in 2020.

The company says it is making an operating loss of R801 000 a day, while fumigation and maintenance costs are spiralling due to the lockdown. The company employs 354 workers, not counting its supplier and distribution networks.

“The current status quo will likely result in Gold Leaf Tobacco having to enter a process of liquidation and/or business rescue, placing further strain on these individuals and their families as well as government,” says Adamjee.

State ‘deaf to the voices’ of citizens

Fita chair Sinenhlanhla Mnguni says the ban is irrational and that government has been deaf to the voices of those opposed to it.

A petition to lift the ban had garnered more than 496 000 signatures by late Monday.

In addition, says Fita, there is no evidence that the ban stops the spread of Covid-19. “There has been a clear failure to balance the interests of citizens who are legally entitled to purchase cigarettes and tobacco products with measures that may responsibly and legitimately be taken to combat the pandemic,” says Mnguni in his affidavit.

The Fita case will hopefully shed some light on the limits of state power in emergencies such as Covid-19.

Mnguni says the regulations imposing the cigarette ban are unlawful and invalid, and violate the constitutional obligations on government to behave with legality.

Lift ban – or explain your process

If cigarette sales are not allowed, Fita wants the government to explain how it came to determine its list of “essential goods” that could be sold during the lockdown.

None of the ministers making pronouncements about the ban have demonstrated how it prevents the spread of the virus. Public comments have been limited to smoking as a health hazard, in which government could have used the same rationale to ban fizzy drinks and chocolates.

Consumers’ rights to body and psychological integrity have been infringed, says Fita, including their “right to security in and control over their own bodies”.

Dlamini-Zuma’s imposition of a ban on cigarettes was motivated by “health reasons”.

“’Health reasons’ is not in law a basis for prohibiting the sale of tobacco and cigarettes under the regulations,” says Mnguni’s affidavit. “The [Disaster Management] Act and regulations have a very specific ambit – not delineated by ‘health reasons’.”

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