South Africa: Tobacco Association and Government Smoke Peace Pipe Over Cigarette Ban Lawsuit

The Fair Trade Independent Tobacco Association (FITA) has said that it would no longer pursue legal action against the government over its ban on the sale of tobacco products during the Covid-19 lockdown.

This follows President Cyril Ramaphosa's announcement on Thursday that, from 1 May, the selling of cigarettes will again be allowed as part of government's phasing-out approach of certain lockdown conditions.

FITA had initially planned to initiate the legal route on Wednesday, but given Ramaphosa's announcement on Tuesday that he would address the nation on Thursday on the measures that will be taken beyond the nationwide lockdown to reopen the economy, the organisation decided to wait for clarity on those measures.

FITA chairperson Sinenhlanhla Mnguni told News24 on Wednesday that, given the circumstances, it would be foolish to go to court knowing the amount of pressure government was already facing without giving it a reasonable amount of time to respond.

In a statement on Friday, FITA thanked Ramaphosa, his Cabinet and their staff, and all other South Africans "who have ensured that, up until now, we have avoided the rapid spread of the coronavirus in our country".

"It goes without saying that our organisation and many other role players along the tobacco industry value chain welcome the announcement by Ramaphosa that, among other things, the sale of cigarettes will be permitted during the next phase of the lockdown period commencing on 1 May," Mnguni said.

"We are of the view that this, together with the tax relief extended to cigarette manufacturers and other industries announced by [Finance] Minister Tito Mboweni [on Thursday], are steps in the right direction by government in mitigating the damaging effects of the lockdown period."

Mboweni said: "Due to the restrictions on the sale of alcohol and tobacco products, payments due next month and in June will be deferred by 90 days for excise-compliant businesses to more closely align tax payments through the duty at source system with retail sales, providing short-term assistance of around R6 billion."

According to Mnguni, these steps are in line with what FITA had proposed to government throughout the current lockdown period in its attempts at engagement with them.

"They will also go a long way in ensuring that issues such as the illicit trade in cigarettes, which has grown exponentially during the lockdown period, are somewhat addressed, and that much-needed funds make their way into the state's coffers.

"These steps further signal that government is now accepting what FITA and many others have been saying and asking for since the beginning of the lockdown period, and what was reiterated in our most recent correspondence to the State Attorney acting on behalf of the Presidency.

'No need to proceed with legal steps'

"Despite taking legal steps to have the ban on cigarette sales lifted, we and our legal team had always extended an invitation to government to engage with FITA."

Mnguni said FITA would continue to engage with the government in order to obtain clarity on what the implications of the next phase of government's efforts to combat the coronavirus are for its industry along its entire value chain.

"Government's actions vis-a-vis the tobacco industry over the last few days have been commendable, and we as an organisation are now of the view that there is no longer a need for us to proceed with the legal steps we had initiated against government.

"We wish to take this opportunity to warn all smokers, retailers and the various players along the tobacco industry value chain that we are still under Level 5 of the different phases of the new lockdown system as announced by Ramaphosa, and no cigarettes should be sold in South Africa until 1 May when we switch to Level 4."

Source: News24

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