OPINION | Where there are illegal smokes, there’s a fire

The latest important study into the ban on
cigarettes has confirmed that the tobacco trade is being handed to the criminal
underworld.

It also exposes the devastation threatening
thousands of families in
some of the most disadvantaged regions of the country who rely on the legal
tobacco trade to put a meal on the table.

Despite the ban on legal sales for the last
54 days, more than 90{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} of smokers have been able to buy cigarettes during
lockdown, according to economists at the University of Cape Town (UCT).

Criminals are selling illegal cigarettes at
hugely inflated prices and “feeding an illicit market that will be increasingly
difficult to eradicate, even when the lockdown and the Covid-19 crisis is
over”, they added.

An illicit
market is bad for customers, who are exploited by high prices, and for
government, who are denied taxes desperately needed to deal with this
unprecedented crisis.

But for members of the Black Tobacco
Farmers Association (BTFA) this growth in illegal trade threatens our very
means of existence and the livelihoods that support our families.

The UCT
report shows that a growing chunk of the SA cigarette market has been taken over by manufacturers who
use no South African tobacco at all – many times larger than it was before the lockdown. With legal
sales in legal outlets halted, and if smokers
keep buying these brands, it spells ruin for our hard-working farmers and their
dependents.

BTFA is part
of an extensive and interlinked tobacco value chain under the umbrella of the
South Africa
Tobacco Transformation Alliance (SATTA). Within this value chain, there are
8 000 tobacco farmers, with 30 000 dependents, and 164 new era (black) farmers.

Our farmers
only supply legal manufacturers of tobacco products. Our businesses produce in
South Africa, are taxed properly and, therefore, deliver hundreds of thousands
of rand in revenue to the government. We also manage our businesses, employ
rural people and support some 4 300 households.

These
livelihoods are all in jeopardy if the criminalisation of the SA tobacco trade
continues.

According to the survey of 16 000 smokers
by UCT’s research unit on the economics of excisable products, during the
lockdown more than half have switched the cigarette brands they buy.

The biggest beneficiary is Gold Leaf
Tobacco Company (GLTC), a Zimbabwe-based operation whose brands, including
Sharp, RG and Savanah, account for one third of the illegal sales.

Excise declarations put GLTC’s market share
pre-lockdown at substantially less than 8{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2}. This means the cigarette ban has
helped them increase their stake in the trade four-fold.

The market share of Carnilinx, makers of
JFK, is five times bigger than before at 10{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2}, and that of Best Tobacco Company,
makers of Caesar, has more than quadrupled from 2{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} to 9{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2}.

None of these companies uses South African
tobacco.

British American Tobacco South Africa’s (BATSA)
share of the market has dropped from 60{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} to 24{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2}.

The report’s authors conclude that the current
ban’s implications for the SA cigarette market are “dramatic”.

For BTFA members, this an understatement.

During the lockdown, our economic potential
has reduced to zero. Even though we have been able to resume our farming
operations, the rest of the value chain is not able to operate.

Because BATSA buys all our tobacco leaf, we
have no market to sell to and all our farmers, their workers, families and
dependent households are suffering.

If the ban continues and the brands of GLTC
and they’re like become more deeply entrenched, our prospects become even bleaker.

The complete collapse of our businesses and
livelihoods is imminent.

This is a tragedy because tobacco growing
has proved its potential to transform entire rural communities that have very
few other resources.

Our members have worked to diversify their
farms by using the income they get from tobacco. It has allowed them to provide
food security for thousands and a belief in a better tomorrow for many more.

Because of our crop, we do not qualify for
government relief funds. If our industry closes down we will again be forced
into a life of dependency on State grants.

The government can longer claim that this
ban is stopping people from smoking. It is stopping smokers from buying legal
cigarettes. It is sustaining criminals in the illegal trade. And it is
impoverishing decent, hard-working South Africans.

BTFA is urging government to lift this unfair
ban which threatens to inflict untold misery on those who deserve better.

Shadrack Sibisi is president of the Black Tobacco Farmers Association. Views expressed are his own.