Court to hear BAT SA tobacco ban challenge

The high court in Cape Town will hear British American Tobacco SA (BAT) application to have the ban on sale of tobacco products set aside next week.

The application is expected to be heard on June 30.

The ban on the sale of tobacco products has been in place since late March when the country entered into a strict lockdown to curb the spread of the coronavirus.

Despite attempts by tobacco companies and manufacturers to lobby for the legal sale of the products, the government has refused to budge on lifting the ban.  

For now, level 3 regulations only allow for local production and sales for the export market.

The ban has led to a loss of tax revenue and has boosted illicit cigarette sales. Sars, which is expecting a huge revenue shortfall for 2020/2021, had expected to collect R14.5bn on excise taxes for tobacco over the 12 months.  

BAT, supported by Japan Tobacco International (JTI), as well as groups and organisations representing the tobacco value chain countrywide, wants the court to declare the government’s regulations prohibiting the sale of tobacco products unconstitutional and invalid, and to have it reviewed and set aside.

In its court papers, BAT detailed the devastating effect of the continued ban on its revenue, and on the national fiscus, which is losing out on billions of rand in excise duties due to the prohibition.

Minister of co-operative governance and traditional affairs Nkosazana Dlamini-Zuma, in an affidavit to the court on behalf of herself and President Cyril Ramaphosa, defended the ban. The government is adamant that the public-health risks associated with tobacco products during the Covid-19 pandemic outweigh the economic loss, which it claims is not as severe as tobacco companies say.

This is the second court application brought in a bid to have the ban lifted. The first application was brought by the Fair Trade Independent Tobacco Association (Fita), a tobacco lobby group representing smaller cigarette manufacturers, in the high court in Pretoria.

The matter was heard in court two weeks ago and judgment has been reserved.

quintalg@businesslive.co.za