Nitasa fears Tobacco Bill could hurt informal traders

The National Informal Traders Alliance of South Africa (Nitasa) recently raised concerns about some provisions of the Tobacco Bill.

Nitasa chairperson, Rosheda Muller said the submissions process was a “box-ticking” exercise.

Concerned about the possible implications of the prospective legislation, Muller said she was worried the Tobacco Bill could be passed without considering hundreds of submissions made by affected parties and various sectors of the economy.

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‘Very worried’

“We’re very worried that despite the issues raised by informal traders, and other affected parties, the Portfolio Committee will simply follow the directives of its political leaders, ignoring many constructive comments, inputs and suggestions [made],” said Muller, adding she had seen the same happen with the National Health Insurance (NHI) Bill.

“Quite honestly, the public participation process [was] a joke, and I have [no] doubt the Committee will remain deaf to our pleas,” she said.

Muller shone the spotlight on the bill’s potential negative impact on informal economy, saying the prospective ban on single-unit cigarette sales and proposed prohibited display of tobacco products would hit informal traders hard.

“Cigarettes form a large percentage of many informal traders’ incomes, play a vital role in attracting customers who stop for cigarettes, and then purchase a range of other products,” Muller said.

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Nitasa’s issue

The Tobacco Bill states in clause 4, subsection 3(c), that “no person shall sell a tobacco product … unless it is in an intact package containing the prescribed quantity or weight of the tobacco product”.

“You don’t need to be a lawyer to understand that this, obviously, means that single cigarettes are banned,” said Muller.

“Because you have to open a cigarette packet to access a single cigarette for sale,” she added.

Muller said most informal traders relied on the sale of single units for profit, adding most customers could not afford to buy a full box of cigarettes at a time – while some “simply want one or two for the day”.

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Do not ‘display’

When it comes to the ban on display of tobacco products, this would negatively impact informal traders’ sales.

“How will our customers know what we are selling if we can’t display our stock?” asked Muller.

She also said unlike their formal counterparts, informal traders usually lack storage facilities such as cupboards to keep stock.

“Banning us and our members from showing what we sell doesn’t make sense in our trading environment,” said Muller.

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Expert weigh-in

“The ban on ‘ama-loose’ (single-unit) sales is long overdue,” said independent economist Professor Bonke Dumisa.

According to Dumisa, most cigarettes sold in public spaces like street pavements are illicit goods – “that don’t comply with South African legislation”.

The economist said the bill would not have micro economic implications since there were no taxes and excise duties paid on the illicit cigarettes.

Dumisa believed the prospective tobacco legislation might be all bark and no bite.

“Unfortunately, this is one of those ‘feel good’ laws where there are just too many legislative which will simply cement the market share of illicit cigarettes,” Dumisa said.

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Lifeblood

Muller said Nitasa had made a written submission to the Portfolio Committee on Health, and requested permission to make oral submissions – said date was yet to be determined by Committee.

“We’re opposed to the Bill’s ban on the sale of single cigarettes [and prohibited] display of all tobacco related products, including cigarettes, and we’re shocked by the inappropriately extreme prison sentences in the Bill,” said Muller.

“The informal trade is the lifeblood of the economy, and government should be doing everything it can to support it, not cut off access to one of its most important sources of income,” Muller said.

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Ongoing process

Yoliswa Landu, Parliamentary Communications services told The Citizen the Portfolio Committee on Health was holding provincial hearings with stakeholders on the Tobacco Bill – visiting Limpopo Province this week.

She said stakeholders would then be invited to make oral submissions once the national tour was complete.
Landu also said those who wished to make oral presentations to parliament should keep following up with the Parliamentary Committee’s secretary for updates.

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