Misleading advertising faulted as Batsa wins tussle in dispute with CK-Cisa
Misleading advertising faulted
THE ADVERTISING Standards Authority of South Africa (ASA) ruled in favour of the two complaints filed by tobacco giant British American Tobacco South Africa (Batsa) in July over misleading advertising by CK Tobacco Distributors and CK Tobacco Trading (collectively referred to as CK) and against the Cigarette Institute of South Africa (Cisa).
“Batsa is pleased to report that the ASA supported the company’s complaints in both matters and ordered both CK and Cisa to withdraw their respective advertisements,” the company said. It is also involved in fighting the illicit trade of cigarettes.
Batsa said it had been working hard to raise awareness about the sale of illicit cigarettes and highlighting the threat posed by illicit products.
“This effort to educate the public has also been supported by attempts to prevent misleading information from being issued in the public space, especially as it relates to the pricing of cigarettes as an indicator that all duties and taxes have been paid, the sub-minimum being R16.50,” the group said.
Last month Batsa’s Bongumusa Makhathini, a director of legal and external affairs, said the illicit tobacco trade cost the South African economy almost R6 billion per year.
In the first case involving CK, ASA ordered CK to withdraw a claim that as of March 2017, “…a price less than R16.50 per pack does not necessarily indicate that excise and/or VAT has not been paid on that pack”.
CK’s claim was made through an “information booklet” distributed to retailers, which stated: “We do not agree with the notion that a product sold under R16.50 is illegal as we can prove that after manufacturing costs (after paying all duties) are not only well below this figure but (that we) are also able to supply our products to our customers below such amount…”.
Comparison However, CK failed to prove its manufacturing costs plus all duties came to less than R16.30, arguing instead that it was possible to sell a packet of 10 cigarettes for which excise duties and VAT had been paid would amount to R8.15.
ASA ruled that a reasonable consumer would assume that the CK booklet was making a comparison between packs of 20 cigarettes and the fact that it also sold packs of 10 was “… largely irrelevant, because no mention is made of the fact that it is actually referring to such packs…” in its information booklet. ASA also ruled that CK had failed to provide evidence to show that it was selling packs of 20 cigarettes as consumers were likely to interpret the claim, for less than R16.50, despite having paid R16.30 in duties and VAT alone.
In the second complaint, Cisa claimed that it could verify that certain brands of cigarettes were legal and that all duties had been paid of which Batsa said this was not possible to prove such a claim.
Batsa’s complaint was that even cigarettes that had been legally manufactured and which complied with all packaging standards might still be illegal, because the relevant duties and taxes have not been paid or because the cigarettes were illegally imported.
“This means that brand names can still be used illegally without the knowledge or authority of the owner, and as such Cisa’s claims that it can verify brands as to authenticity and legality is misleading,” the group said.
Cisa failed to submit any evidence to support its assertion.