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Wednesday, June 29, 2022

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Tobacco industry victorious as SCA backs its case that lockdown ban on sales was unlawful

The respondents, led by tobacco giant British American Tobacco, were farmers, processors, manufacturers, retailers and consumers, situated at every level of the supply chain for tobacco and vaping products.

The respondents, led by tobacco giant British American Tobacco, were farmers, processors, manufacturers, retailers and consumers, situated at every level of the supply chain for tobacco and vaping products.

Published Jun 14, 2022

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The local tobacco industry has finally been vindicated after the Supreme Court of Appeal (SCA) yesterday shot down the government’s appeal against a ruling by the Western Cape Division of the High Court, Cape Town.

The SCA dismissed an appeal by the Minister of Co-operative Governance and Traditional Affairs against an order of the Western Cape Division of the High Court, Cape Town, which ruled that the regulatory ban on the sale of tobacco, tobacco products, e-cigarettes and related products, except for export, during the national state of disaster was unconstitutional and invalid.

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In 2020 it was reported that the South African economy was losing around R36 million per day in tax revenue due to the sale of illicit cigarettes after the government banned the sale of tobacco during the nationwide lockdown.

The ban knocked the sector, putting jobs on the line and stalling local investment by the sector, with companies in the sector dented by the financial fallout amid the Covid-19 wrecking ball.

The SCA found that the ban had infringed the right to freedom of trade in that farmers could not sell and nobody could buy their tobacco. Tobacconists were unable to trade. Farmers were unable to use their farms productively and manufacturers were unable to use their costly factories and equipment.

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This was an unlawful infringement of the right to property.

The respondents, led by tobacco giant British American Tobacco, were farmers, processors, manufacturers, retailers and consumers, situated at every level of the supply chain for tobacco and vaping products.

Finally, the SCA held that Regulation 45 was not strictly necessary or essential in order to protect the public or to deal with the destructive and other effects of the disaster, as contemplated in s 27(3) of the Act.

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In the result, the SCA dismissed the appeal and upheld the respondent’s cross-appeal on costs.

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