File image: IOL.

CAPE TOWN - The South African Informal Traders Association (SAITA) is calling for Government to confer with them before banning the display of cigarettes and other tobacco products. 

President of SAITA, Rosheda Muller says: “The Minister of Health has said he is going to ban the display of cigarettes by all traders and retailers, no matter how big or small. If you are one of the thousands of hawkers, informal traders or spaza shop owners across South Africa this ban will hit you hard. We estimate that about one third of the average informal traders’ income comes from cigarette sales. These are people who already struggle to make a living. If their cigarette market is taken away, they may be driven to a life of crime”. 

The proposed call from government to ban the display of tobacco products comes after the Minister of Health sanctioned tighter measures on health.  SAITA however disputes this proposed plan, citing tobacco products as essential for small businesses. 

“The Government is always talking about how important small business is for jobs, and yet they are not doing much to look after our interests”, says SAICA.  SAITA wrote to the Minister of Health about the proposed ban who promised to consult. 

“That was a year ago and we’ve heard nothing. Government is always talking about how important small business is for jobs, and yet they are not doing much to look after our interests”, says Muller. 

Market value chain

According to the 2011-2012 profile of the South African Tobacco Market Value Chain report by the Department of Agriculture and Fishing, the tobacco exports from the City of Cape Town Metro between 2004-2006 was valued at approximately R6.7 and R6.9 million respectively.

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Illicit tobacco trade

Muller added that by hiding cigarettes, the demand for it will only be greater. This could possibly elevate illicit tobacco trade, she said. 

“Hiding cigarettes from sight will make it easier for criminals to distribute and sell illegal or counterfeit cigarettes. The illegal cigarette trade in South Africa is a huge problem and banning the display of cigarettes will play into the hands of the criminals and penalise our members. We should be fighting criminals, not helping them”. 

The illicit tobacco industry is a multi million dollar industry which robs government of tax money. 

On a global scale, 330-660 billion cigarettes a year are illicit, smuggled, counterfeit or tax-evaded, according to the Tobacco Institute South Africa 2010-2016 reports. 

In South Africa

If treated as a collective tobacco company, illicit trade at 22% market share (2016) would rank second in the SA market place.

Since 2010, the SA Government has lost well over R27 billion in unpaid taxes (excise duty and VAT on excise) due to illegal cigarettes.

Muller says she understands the Government wants to stop people smoking, especially the youth. 

“But the solution isn’t to hide the products, the solution is education. Go into the schools and show our kids what smoking does to you”, declared Muller. 


 

- BUSINESS REPORT ONLINE