Tough new bill lights a fire under local tobacco industry
March 19, 2008
By Sibongile Khumalo
Johannesburg - The tobacco industry is bracing for the financial implications that will come with the introduction of the new Tobacco Products Control Amendment Bill, which was discussed in parliament yesterday.
The new bill, which was mooted last year, seeks to tighten cigarette regulation. It is expected to be signed into law by the end of the year.
The bill will prohibit the sale of tobacco products in health and education institutions, increase the legal age for buying tobacco from 16 to 18, restrict the sale of tobacco products from vending machines and control the placement of such machines.
The new bill will make advertising, promotion and sponsorships by tobacco industries illegal unless they are made anonymously, and will force manufacturers to display ghastly images of people suffering from smoking-related diseases to inform users about the effects of the habit.
British American Tobacco South Africa (Batsa), which holds the country’s largest tobacco market share, has expressed concerned about the bill. Batsa spokesperson Anthea Abrahm said: “If passed, the bill will, among other things, dramatically impact on the industry’s ability to conduct day-to-day activities such as communicating with the consumers, trade partners and shareholders, as well as financial reports.”
Abrahm raised concern about the “distinct” lack of consultation on the bill between the department of health and the tobacco industry.
“We have consistently urged the department to consult as widely as possible,” she said. Batsa has an estimated
65 percent share of the total tobacco market in a country where one in four adults chooses to smoke any one of 24 cigarette brands.
According to Batsa, the South African government raises R8 billion annually in excise and value-added tax through the sale of tobacco products. It is estimated that taxation on these products contributes more than R7.5 billion to the fiscus each year.
The company’s factory in Heidelberg employs 2 000 people and produces 27 billion cigarettes a year for local and international markets.
The bill’s first section, which was signed into law by President Thabo Mbeki last month, proposes tighter regulation of the Tobacco Products Control Bill, introduced in 1999 by then health minister Nkosazana Dlamini-Zuma.
The bill has been severely criticised by the Tobacco Institute of SA (Tisa), which said it would have crippling financial effects. Tisa chief executive Francois van der Merwe said the industry had been prepared to go the legal route had parliament not allowed more time for consultation.
“Yesterday parliament granted us an extension to conduct public hearings, which will resume next month,” he said.
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