Tobacco court case only likely to be heard in two weeks’ time
If the idea of the cigarette ban is to preserve the health of the nation, it’s not having much of an impact.
Smokers are getting their fix, albeit it three times the usual price. And they’re trading down. Marlboro smokers are finding the much cheaper RG brand quite acceptable. A carton of 200 RG goes for R650 on the black market, but that price is going up as stock becomes harder to a source.
When the ban is eventually lifted – either by government fiat or on the instructions of a high court judge – the cigarette market will likely be forever changed. Some of the 11 million smokers in SA may have ditched the habit, but others will have permanently switched brands, which should be good for lower-cost producers such as Gold Leaf, but not so good for higher-end producers such as BAT.
Sars has been snookered
And, as Tax Justice SA has pointed out, the illicit trade which SA Revenue Services (Sars) has worked so arduously to stamp out has resurfaced with a vengeance. This time, it won’t go away so easily, which means a permanent loss of revenue to Sars, which has already lost about R2 billion due to the ban.
The illegal trade, which never went away, now rules the market. The idea of stamping it out, even after the ban is lifted, seems hopelessly unrealistic.
As one senior business leader commented, this is what happens when bureaucrats and ministers run the economy. The ban has blown jumbo-sized holes in SA’s already porous borders.
Court challenge
Meantime, the Fair-trade Independent Tobacco Association (Fita), representing smaller producers for the main part, says its court challenge against the government ban is likely to be heard two weeks from now.
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