Evidence-Based Regulation of Tobacco Could Save Governments Millions Lost Through Illicit Tobacco Industry

27 October 2023
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The South African Parliamentary Portfolio Committee on Health is currently conducting consultation meetings to get feedback from communities on the proposed Tobacco Products and Electronic DeliverySystems Control Bill.  The bill contains a number of amendments that may significantly impact, and will have far-reaching consequences for the tobacco and electronic delivery systems industry, as well as the South African economy.

South Africa has always had a history of regulating the tobacco sector. However, concerns have been raised over its blanket approach to regulation whereby combustible cigarettes are regulated in the same manner as Electronic Nicotine Delivery Systems (ENDS) and other novel nicotine products. This is despite evidence that novel nicotine products have the potential to greatly reduce the harm caused by smoking combustible tobacco.

Smoking combustible tobacco exposes smokers to inhaling about 7,000 chemicals in cigarette smoke. Some of these compounds are chemically active and trigger profound and damaging changes in the body. Tobacco smoke contains over 70 known cancer-causing chemicals also known as carcinogens.

However, novel nicotine products have greatly reduced the rate of morbidity and mortality in countries that have adopted safer alternative products. Apart from the immense health benefits tobacco harm reduction possesses, it also stands to greatly benefit economies in ways unimaginable in the long run.

During the COVID-19 pandemic, South Africa under the State of Disaster Management Act, the Coronavirus Command Council banned the sale of tobacco products nationwide. However, in the midst of these tight restrictions, data has shown that South Africa experienced the highest levels of illicit trade in tobacco and the illicit tobacco market made huge profits at the expense of the industry.

According to data released by the University of Cape Town, (REEP), by June 2020, the legal manufacturers' market share dropped to 23 percent while illicit manufacturers were able to maintain higher prices after the lifting of the ban. Only 9 percent of smokers reported quitting during the tobacco ban while 93 percent of smokers continued to purchase tobacco during the ban.

Speaking at the just-ended 3rd Edition of the Harm Reduction Exchange in Nairobi Kenya, Tim Hughes, a Certified Director of the Institute of Directors of South Africa and Managing Director of Read Dillon (Pty) Ltd said illicit trade was growing in leaps and bounds in South Africa and the proposed bill could worsen the situation.

"Illicit trade is booming in South Africa and supermarkets, fuel stations, and SPAZAs lose R87.5 million a day in turnover. There is some illegal cross-border importation of leaf and finished products (largely from Zimbabwe). However, the major source of illicit tobacco is South Africa's domestic manufacturers," said Hughes.

By June 2020, the legal manufacturers' market share dropped to 23 percent with prices increasing more in informal areas. Stick sales increased as did their price differential. The definition of illicit is largely informed by excise and Value Added Tax (VAT) not paid, or under-declared through undercutting legal manufacturers on price. Prior to the 2020 tobacco sales ban, the illicit rate was 30 percent.

"The SA tobacco market has undergone structural change with illicit products possibly as high as 70 percent of the total market. There has been considerable loss to the fiscus and smoking incidence has not declined.  Government's introduction of the Tobacco Products and Electronic Delivery Systems Control Bill could also worsen things. South Africa is not ripe for the endgame. Smoking incidence is high due to a huge informal market, huge illicit market, poor public health education, few alternatives provided by public health and unenforceable legislation."

The number of tobacco smokers in the world is projected to remain at around 1.1 billion until at least 2025.  Four out of five of the world's smokers are in low-income and middle-income countries.

Dr. Murat Aydin, a leading expert in healthcare reform in Turkey said data and science should lead tobacco regulation and with proper and scientific legislation, even economies can benefit.

"Regulations that are not evidence-based in public health policies inevitably lead to unintended consequences. The unintended consequences of non-evidence-based public health regulations include health risks, lack of credibility, resource waste, economic impact, information pollution, human rights violations, injustice and inequality," said Dr Aydin.

He added that centralised and authoritarian public health policies related to tobacco control do not align with the medical approach of 'the patient not the disease'.

"We need to discuss whether the World Health Organization's decision-making process is transparent enough. Is it completely free from political contexts? Are there conflicts of interest in the tobacco control policy-making process? If scientific evidence in favour of tobacco harm reduction becomes overwhelming, will the WHO's current position be subject to any consequences?"

"We also need to ask why there were no long-term epidemiological studies required for COVID-19 vaccines, but long-term epidemiological studies are needed for alternative products to combat smoking, where there are three times more deaths due to smoking in the same period?"

He further stated that individuals pay the price for the wrong decisions of regulators who make decisions on their behalf and general policies developed under the name of tobacco control are inadequate to combat this issue anymore.

He also said any public health policy that is not evidence-based may lead to bad public health consequences.

"The struggle in question is more about the conflict between those who adopt innovative approaches in the light of science and conservatives who repeat policies that do not yield results. Both scientists and consumers will advocate for and promote change more strongly as scientific evidence increases."

Samuel Mukandi, a harm reduction consumer advocate and director of THR in the Democratic Republic of Congo (DRC) said incompetence was THR's biggest enemy in his country.

"In the DRC you find that in the Ministry of Health, non-medical or non-public health people are appointed Ministers of Health and some to head some health departments in government. It was only recently that the ministry appointed a medical doctor as a Minister of Health. You find that such appointments tend to slow down and resist any harm reduction intervention available."

Smoking prevalence in the AFRO region remains the lowest among all WHO regions (an average prevalence rate of 18.5 percent in 2020) and this rate is narrowing towards 11.2 percent in 2025. However, according to the AFRO region WHO office, countries in the African Region are experiencing an increasing rate of tobacco use. ENDS

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