SMOKES WAR
… Tobacco group drags BATSA into a fresh legal storm
JOHANNESBURG
- After years of grappling with tax non-compliance and just over a year of navigating through government restrictions aimed at curbing the spread of the Covid-19 pandemic, tobacco producers are bracing for a fresh legal challenge.
This time, however, the battle will be over alleged illegal promotions.
The Fair-Trade Independent Tobacco Association (FITA) is accusing British American Tobacco South Africa (BATSA) and retail outlets of selling or gifting additional products with a tobacco product, in contravention of section 4 of the Tobacco Act. The act forbids the gifting or cash rebate of any contests, events or consideration with the purchase of a tobacco product.
FITA wrote to the South African Revenue Service and the Department of Health on Tuesday accusing BATSA of contravening the Tobacco Act.
While different sides of the tobacco industry have been at each other's throats for the past year over allegations of floating the cigarette ban during 2020's hard lockdown - and were similarly at odds in recent years over various claims of flouting tax laws - this case relates to legislation barring tobacco producers to partake in promotion of other products, as stated in the Tobacco Act of 1993.
In its letter, which Fin24 has seen, FITA chairperson Sinenhlanhla Mnguni said its members received information that "certain retail stores" in Johannesburg were flouting the Tobacco Act by selling loose cigarettes to customers as well as gifting them with R5 cell phone airtime vouchers.
"It is our contention that in selling the said cigarettes and handing over or gifting the airtime and tin box as aforesaid, BATSA and the said retailers contravened sections 3 (1) (a) and section 4A (2) of the Tobacco Act," Mnguni said.
In the letter, addressed to SARS Commissioner Edward Kieswetter and the Department of Health's chief director for nutrition and health promotion Lynne Moeng-Mahlangu, FITA said BATSA should be liable to a fine of R1 million, according to the act.
"Further, BATSA advertised or promoted or caused retailers to advertise or promote tobacco products through direct or indirect means. Further, the retailers were not allowed to sell loose cigarettes as the sale of a tobacco product is prohibited unless it is packaged in the prescribed manner in the packaging," said Mnguni.
FITA's letter included images of loose cigarettes and promotional with pins included, asking customers to claim R5 airtime vouchers. The airtime redemption voucher in one of the images included the standard tobacco consumption warning seen on cigarette cartons.