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Agri SA is highly concerned by the legislative proposal to enforce so-called plain packaging regulations for cigarettes and other tobacco products. Agri SA has submitted its comments to the Control of Tobacco Products and Electronic Delivery Systems Draft Bill, whose deadline for submissions closed today. If the Bill is enacted, the combined 8 000 jobs of commercial and emerging tobacco farmers in the rural communities of Limpopo, Mpumalanga and the North West, will be endangered.
Independent research conducted by Ipsos found that more than 1 million packs of cigarettes are sold illegally daily (i.e. below the excise rate) in South Africa, which translates to a tax revenue loss of more than R7 billion in 2018. Plain packaging will further strengthen this trend, as it makes counterfeiting and excise evasion far easier. The further implication is that child smoking will increase alongside unscrupulous illicit cigarette trade.
“The South African Tobacco Industry is already thoroughly regulated, and any further intervention will be counter-productive in terms of public health and crime prevention, said Pietman Roos, Head of Corporate Affairs and Communication at Agri SA. “The plain packaging provisions will also decimate an entire value chain, infringe the constitutional rights of tax-paying companies, and lead to an increase in illicit trade.”
Agri SA contends that the provisions would infringe section 16 (right to free speech) and section 25 (property rights) of the Constitution, and that such limitation is disproportional to the policy aims as there is already a raft of public health regulations in place.
“The South African tobacco industry has already invested heavily in supporting over 150 emerging black farmers as the crop presents unique opportunities to drive agrarian reform. Protecting the gains already made and supporting further growth should override untested and destabilising regulatory interventions.”
Agri SA supports government policy to promote public health through, among others, education and raising awareness on health issues, but firmly believes that the proposed legislation will in fact be counterproductive. Clamping down on the illicit cigarette trade would achieve far more policy aims.
Agri SA will continue to engage with government on the plain packaging proposal in the interest of tobacco farmers, both commercial and emerging.
Agri SA, Head of Corporate Affairs and Communication
C: 066 201 8326