Mayor and community oppose tobacco bill
According to the LBBF, the community wasn’t consulted when the bill was drafted.
The mayor of the Lesedi Local Municipality (LLM), Mluleki Nelson Nkosi, said at public hearings in Heidelberg on November 24 on the Tobacco Products and Electronic Nicotine Delivery Systems Control Bill that contributions to the council revenue from the British American Tobacco (BAT) factory in Heidelberg had dropped from R18m monthly to just R4m.
This is after the Covid-19 ban that resulted in illicit tobacco taking over the market.
Nkosi said the company has not recovered its market share even after the ban was lifted. It has downsized and retrenched staff because it has lost a lot of revenue, causing its contribution to municipal revenue to drop monthly by R14m.
Most staff retrenched are from the Lesedi community.
The Lesedi Black Business Forum (LBBF) applauded Nkosi for raising the community’s concerns about the tobacco bill and standing firmly with the community.
According to the LBBF, the bill threatens to criminalise hard-working people just trying to preserve their dignity through honest work by banning the sale of loose cigarettes, which is common in the informal trade.
Many families and individuals, including spaza shops, informal traders, shebeens and taverns, earn much of their income from selling tobacco, but the bill aims to end this.
On November 24, the LBBF, supported by the South African Spaza and Tuckshop Association and the Food and Allied Workers Union, handed a memorandum to Nkosi.
They called on him to intervene on behalf of the community with the speaker of parliament and the chairpersons of the National Council of Provinces and Portfolio Committee on Health to stop the public hearings on the bill and honour the commitment by the deputy minister of health to table the bill at the National Economic Development and Labour Council (NEDLAC) for consultations with represented parties, including communities.
The various stakeholders’ demands included that the mayor tell the parliamentary committee about the concerns of the people of Lesedi about the bill’s potential impact on municipal revenue and the municipality’s ability to provide services to communities.
A socio-economic impact assessment commissioned by BAT that LBBF has seen revealed the factory added R3.2b to the Lesedi District GDP last year, contributed R42.2m to municipal revenue and supported 3 854 jobs in an area with an unemployment rate of 43%.
“It is an outrage that the Lesedi community, who already face crippling unemployment, were not consulted when this bill was drafted,” said LBBF spokesperson Bayanda Radebe.
“This community has the most to lose if this bill is passed, but we have been treated like pawns in a political game.
“The deputy minister of health promised to refer this bill to NEDLAC for consultation, but that promise has been broken. Parliament is rushing full steam ahead to process the bill despite everything.
“We have also not seen the economic impact assessment that the Department of Health promised to do.
“After the health department ignored the Lesedi community, we are asking our mayor to protect this community from the devastating impact this bill will have on jobs in our district.
“We remind the government that our municipality faces crippling unemployment and growing poverty and that the protection and promotion of employment should be the overriding priority of government and Parliament at this time.’’
The LBBF also called on the government to enforce existing laws and to prosecute those selling tobacco products to minors.
They further insisted that the government should prioritise illicit trade before putting further restrictions on the sale of legal tobacco products.
HERAUT requested a comment from BAT in South Africa.
“Nkosi rightfully emphasises BAT South Africa’s (BATSA’s) Heidelberg factory’s pivotal role in Lesedi’s local economy, expressing valid concerns about the proposed Tobacco Products and Electronic Delivery Systems Control Bill,” said Johnny Moloto, the area head of external affairs for BAT Sub-Saharan Africa.
“Oxford Economics’ socio-economic assessment reveals the BATSA factory’s substantial impact, contributing R3.2b to Lesedi’s district GDP, R42.2m to municipal revenue, and supporting 3 854 jobs in an area with 43% unemployment.
“For each direct job at the Heidelberg factory, the research indicates support for another 92 jobs elsewhere in the SA economy.
“Notably, in the Lesedi district, employees at the factory, facing high unemployment, support an average of three dependents and earn over twice the national average wage.
“This study coincides with a surge in illicit tobacco trade post the unconstitutional five-month Covid-19 tobacco sales ban in 2020, severely affecting the legal industry.”
BATSA, which employed 1 800 highly qualified staff in 2019, has since been compelled to retrench over 30% of its workforce.
The illicit cigarette trade now comprises up to as much as 70% of the SA market.
“The proposed Tobacco Products and Electronic Nicotine Delivery Systems Control Bill introduces measures like plain packaging and a retail display ban,” Moloto continued.
“However, the bill remains silent on the prevalent issue that we believe is, in fact, driving increases in smoking incidence – illicit trade.
“The measures this bill introduces may drive consumers towards illicit products, circumventing legislation while severely restricting the legal industry.
“Its implementation threatens to hasten the legal industry’s decline, incurring substantial costs for the SA economy, and particularly impacting the people of Lesedi, while not even achieving its objective of reducing smoking incidence.”
