Press release – FITA – for immediate release
It has come to our attention that certain multinational cigarette manufacturers have again resorted to desperate, unlawful and anti-competitive measures in order to maintain their market dominance in a market that has undergone significant shifts insofar the dynamics between the traditional large and more known multinationals and the local manufacturers.
The multinationals have resorted to bribing consumers (not the first time bribery has featured in the same sentence as these companies) by inter alia offering free airtime in return for purchasing their brands, in contravention of inter alia the Tobacco Products Control Act, Act 83 of 1993 (“the Act”). The concerned multinationals further gift consumers tins in which they can place their purchased cigarettes inside.
Section 4A (2) of the Act is clear on the above contraventions and reads as follows:
4A Free distribution and reward prohibited
(2) No person shall offer any gift, cash rebate or right to participate in or attend any contest, lottery or game, or any sporting, cultural, social or recreational event, to any person in consideration of the purchase of a tobacco product, or the furnishing of evidence of such a purchase, or the confirmation of use of a tobacco product.”
Their offering of free tins and airtime to lure consumers to buy their goods is in clear contravention of the above and is a result of our members (local manufacturers) over the years having managed to slowly attain traction in the overall market when measured against the market share held by the multinationals. These dynamics have led to many other visibly questionable practices and actions by the multinationals in their attempts to retain their market share in a shrinking market. Simply put, although there are fewer smokers in South Africa today than there were 15 years ago, many of them are no longer so brand conscious when it comes to the more well-known multinational brands, instead shifting towards some of the local manufacturers’ brands. This has caused the fightback from multinationals via a number of avenues including a very misleading public campaign which only serves the commercial interests of these very multinationals.
History has shown time and time again, and we can no longer be surprised by the lows these multinationals are prepared to stoop to in order to maintain market dominance, we call upon government and in particular the Department of Health and the South African Revenue Service to ensure that these multinationals are held to account and do not continue to act with impunity when clearly contravening the laws of the land. We as an organisation certainly intend laying the necessary complaints with the relevant enforcement bodies in order to prevent what we deem are inter alia unlawful and anti-competitive practices from continuing.
In closing, we wish to commend President Cyril Ramaphosa for his call during last night’s State of the Nation Address that we all buy locally-made goods to drive up demand in our economy, and the push for retailers to stock more South African goods. This is the position we have always advocated that government adopt in order to stimulate economic growth in the country as it has been shown time and time again that multinationals only seek to exploit our resources for profits, which profits are then shifted off-shore through aggressive tax avoidance schemes.
Issued by the Fair-trade Independent Tobacco Association: 21 June 2019
For queries kindly contact Monique Vogel t: 072 720 7919; e: Monique@fita.co.za