Agriculture Value Chain Discussion Series – Tobacco Industry

  • 03 August 2020
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Dr John Purchase is the anchor of this session. Johnny Moloto, Head of External Affairs at British American Tobacco South Africa (BATSA), Sinenhlanhla Mnguni Chairman of Fair Trade Independent Tobacco Association (FITA) and Shadrack Sibisi, Chairman of the Black Tobacco Farmers Association (BFTA), are on the panel.

We hear testimony from tobacco industry workers and farmers who speak on the harsh impact of the ban on their livelihoods. The tobacco industry is said to have lost in access of 2 billion rands in revenue since the lockdown began, while illegal trade of tobacco products continues to rise. The halt in sales brings forth relevant questions about job security and the long term repercussions for those working legitimately in the tobacco industry. Mohau, who works in the tobacco industry says that the ban has negatively impacted their lives in a very harsh manner, “we know that the government in their efforts to control the spread of covid-19 went as far as banning the sale of tobacco. What is frustrating for us is that tobacco is easily available at every corner of the township. People have not stopped smoking because sales are continuing on the black market. The illegal sales make it especially hard for us who are in the legitimate trade of tobacco because while our livelihood sources halted, tobacco sales continue.”

Shadrack Sibisi shares that BFTA has been at the forefront of the efforts from different stakeholders in the tobacco industry to get the tobacco ban lifted. He says they started farming tobacco in 2010 in Mpumalanga. They initially struggled with expansion efforts for many years. For a long time, they could not find tangible reasons as to why tobacco farming grows at such a slow pace in South Africa. In 2016, they identified the illicit trade of cigarettes as a hindrance.

Sinenhlanhla Mguni Talks gives a background on the court action that they have taken to challenge the ban on cigarette trade by government. He recalls how the initial confusion around the ban with conflicting messages coming from different sections of government. Once it became clear that government had no intention of lifting the ban, it became apparent to them as stakeholders in the tobacco industry, to seek the help of the court to ensure the preservation of incomes. He alludes to political power plays being one of the factors that led to the eventual indefinite ban on the sale of tobacco. Sinenhlanhla goes into detail about their court action and the grounds on which it stands.

Johnny Moloto paints a clear picture of the extent of the damage to the industry caused by the ban. He says that they braced themselves for was to come once the President announced the lockdown. They were aware that under the Disaster Management Act, the tobacco industry would be one of those hardest hit by the lockdown regulations. He explains the concerns raised by them in communication with the government. “It was quite clear to us at that time that the government had not taken into account the complexity of the value chain. To allow farming, but not allow trade was short-sighted.” He clarifies that they did not just voice their dissatisfaction and complaints, but they also came up with suggestions and regulations that could work for all parties involved. “We will play our part to defend the jobs of those who work in the industry. We will also play our part to defend the consumer’s right to choose.” He says the only people benefiting for this situation are the people dealing in illicit trade. “While the state is losing over 34 million a day, illicit trade is making in access of 100 million a day.”

Dr John Purchase expresses his concern with the lack of willingness on the government’s part to engage with the tobacco industry and find a resolution.
The panel explores the different theories doing the rounds about why the government is so intent on pushing back on the pressure from the industry and doubling down on the decision to allow the ban to continue. Sinenhlanhla says that efforts to thwart illegal trade of tobacco products have been spoken about since long before he joined the industry, but are yet to find a remedy for the problem.

Johnny encourages stakeholders in the tobacco industry to do thorough introspection and identify the issues within the tobacco industry supply chain that compromise them. He says that there should be accountability from them in making sure that they do not allow their products to filter out into the illicit trade market.  “How is it that our brands are still available in the illegal market four months into the lockdown?”.