OPEN LETTER TO THE GOVERNMENT OF THE REPUBLIC OF SOUTH AFRICA AND THE DEPARTMENT OF TRADE AND INDUSTRY

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Date : 29 March 2020

To Attention : : THE DEPARTMENT OF TRADE AND INDUSTRY MINISTER EBRAHIM PATEL E-mail : KMotlhabi@economic.gov.za

Dear Honourable Minister

OPEN LETTER TO THE GOVERNMENT OF THE REPUBLIC OF SOUTH AFRICA AND THE DEPARTMENT OF TRADE AND INDUSTRY

On Monday, 23 March 2020 when the President of the Republic of South Africa, Cyril Ramaphosa, announced a nationwide lockdown with effect from 00:00 on Friday, 27 March 2020 our organisation elected at the time to put our full support behind government’s call for the said lockdown. Information surrounding the implementation of said lockdown was at the time very limited

The President in his aforementioned announcement further stated that in the course of that week, and prior to the lockdown, regulations would be published on what businesses could continue trading as they provided what was classified as essential goods and services. As a collective, and with the best interests of inter alia their employees and the citizens of the country in mind, our members jointly took a decision that they would shut down operations at their factories until such a time as and when government had deemed it safe for its citizens to resume normal life.

At the time of the aforementioned decision taken by our members it was not clear from government that inter alia the sale of cigarettes would be prohibited under the regulations. This has since come to fruition and led to the basis of the formulation of this letter to your respected office.

We agree fully with government that all steps necessary to ensure that the unnecessary movement of people is avoided should be taken. However, we have noted that the sale of cigarettes to the public at large while they are able to purchase other goods which have been labelled as essential has led to a number of issues manifesting which could have been possibly avoided had there been prior engagement between the state and industry stakeholders before the regulations were implemented.

It has now been brought to attention through a number of sources and the media that the illicit trade in cigarettes and tobacco products has not abated, and has in actual fact taken an upward trajectory. This is not surprising when considering the facts, and it now seems that, if anything, the regulations have led to the opportunistic criminals involved in the illicit trade taking advantage in order to supply a market which can at this stage be described as desperate.

The knock-on effect of this is that the sale of cigarettes is continuing and the profits obtained therefrom are lost to our economy, and further, our receiver is not collecting the taxes it ought to. These monies which are lost to our system are monies which our economy is in desperate need of at this stage, particularly in light of the lack of activity in our economy due to inter alia the government-imposed lockdown in order to avoid the further spread of the coronavirus.

Further, the banning of the sale of cigarettes and other products will lead to people becoming desperate and looking for methods to bypass the regulations in order to source the goods they require. We are already seeing evidence of this being reported by the media and we would therefore urge government to reconsider this aspect of the regulations in order to avoid inter alia a large-scale state of unlawfulness where citizens are contravening the lockdown regulations in order to acquire cigarettes.

Authorising at least the distribution and sale of cigarettes at retail stores, spaza shops and filling stations would give the economy a much-needed boost and avoid a situation where our citizens, out of desperation, contravene the regulations of the lockdown en masse. This step by government could also see a large number of jobs along the tobacco industry value chain being saved as the various players along the chain are able to derive some form of income during these trying times.

We accordingly urge government to reconsider the nationwide prohibition of the sale of cigarettes for the reasons set out herein in above.

We are also willing to engage government on the above and provide invaluable input as industry stakeholders in order for the state to make a more informed decision in relation to matters that affect its citizens vis-à-vis the tobacco industry.

We trust the above to be in order and await your reply in connection thereto at your earliest convenience.

Yours faithfully, Signed Electronically
Sinenhlanhla Mnguni
CHAIRPERSON: FAIR-TRADE INDEPENDENT TOBACCO ASSOCIATION

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