Tobacco wars escalate as Batsa takes broad swipe at Fita members

British American Tobacco SA (Batsa) has taken a broad swipe at rivals represented by the Fair Trade Independent Tobacco Association (Fita), hours after the details surrounding the Level 2 lockdown regulations were made public, The Citizen reports.

Cigarette and tobacco product sales are legal again from Tuesday and in a statement on Monday afternoon, Batsa seemingly accused Fita members of capitalising on the sales ban during lockdown.

While the group was quoting earlier research conducted by the Research Unit on the Economics of Excisable Products (REEP) under the directorship of Professor Corné van Walbeek in the University of Cape Town (UCT), Batsa made it clear that some competitors gained significant market share while it was unable to operate normally.

It added that it had “confirmed” the report’s findings without elaborating.

The statement, quoting the research report, Batsa singled some brands: “RG, from the Zimbabwean-owned and controlled Gold Leaf Tobacco Corporation has exploded in sales over the course of the lockdown.”

Both Batsa and Fita took the government to court in separate applications to have the tobacco ban set aside during higher lockdown levels.

Batsa’s court challenge of the ban hinged on its supposed unconstitutionality, and they told the Western Cape High Court that the harm caused by the ban far outweighs the benefits to the public health system.

In a separate case, Fita argued that the ban on the sale of cigarettes was harming both the industry and individuals, and the reasoning behind it was irrational.

Fita chairperson Sinenhlanhla Mnguni told The Citizen that the organisation was unaware of Batsa’s statement and that he would need to study it in order to respond accordingly. This article will be updated with his comments when made available.

Similarly, Batsa representatives were not immediately available to expand on the comments made in their statement.

According to the statement, at “11.6% of the market this one brand (RG) saw approximately 10 MILLION (sic) cigarettes purchased every day during lockdown at prices that were up to five times higher than prior to lockdown despite no tax being paid.”

It also singled out another brand Fita represents: “Before the ban, Batsa had a market share that was 32 times larger than the Fita member, Best Tobacco. The REEP report shows during the month of June, Best Tobacco was already bigger than Batsa.”

Quoting Batsa’s head of external affairs, Johnny Moloto, the statement added that tax “is only paid by people and companies who obey the law.

“South Africa now has a tobacco market that is controlled by people who don’t obey the law.

“The ban on legal sales has been the greatest gift ever given to tobacco smuggling criminals. Increasing the rate of excise, that they don’t pay anyway, would be the cherry on top…

“Our company has not shipped a single cigarette to South African retail or wholesale customers since the ban came into effect in March. This is why we, as the previously largest tobacco company in the country, are barely a footnote in the REEP reports now,” Moloto said.

“Furthermore, we co-operate fully with SARS and have SARS officials in our facility in Heidelberg on a daily basis controlling and monitoring production and export shipments.

This is a developing story and will be updated accordingly.

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