British American Tobacco South Africa (BAT SA) has announced that it is launching an urgent legal challenge against the government’s decision to extend the ban on cigarette sales to alert level 3.
In a statement on Friday, BAT SA said Japan Tobacco International and other lobby groups in the tobacco value chain are supporting its legal challenge.
“BAT SA has made every effort to constructively engage with the government since the ban came into force, including making detailed submissions, along with other interested parties, to various Ministers as well as directly to the Presidency,” the company said.
‘No formal response’
It added, “To date, no formal response has been received from the government, and BAT SA has also not been included in any of the government’s consultation processes so far.”
BAT SA had earlier contemplated challenging the ban in court, but decided against it in early May after receiving a formal response from the National Command Council (NCC).
It said at the time, “Having considered the response from the government and noting President Cyril Ramaphosa’s public statement on 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.”
In its statement, BAT SA argued that the ban will “drive millions of smokers to the illicit market” and rob the government of “much-needed excise tax contributions.”
‘Ban is threatening legal tobacco sector’
Johnny Moloto, BAT SA’s head of eternal affairs, said, “Given the situation, and the lack of any response from the government despite our ongoing efforts to engage with them, we are now commencing urgent legal proceedings.
“The government’s continued ban on tobacco sales is threatening the survival of the legal tobacco sector and the livelihoods it directly supports.
“It has only succeeded in significantly growing a massive and nationwide illegal industry at the direct expense of law-abiding businesses, citizens and taxpayers.”
BAT SA now joins the Fair Trade Independent Tobacco Association (FITA) and advocacy group AfriForum in challenging the ban. FITA’s court case is likely to be heard in the week on 9 June.
BAT SA has a 78 percent market share of the legal cigarette market in South Africa and claims to have contributed R13 billion in taxes in 2019.
It also said it procures 90 percent of the locally grown tobacco leaf, “supporting tens of thousands of farmers and their families across the provinces.”