The Tobacco Industry Interference Index Report for South Africa 2020, launched this month, looks at the activities of the tobacco industry during 2019. Although the report was completed by an international company, three South African organisations were invited to edit the document, including the National Council Against Smoking (NCAS), the Research Unit on the Economics of Excisable Products (REEP), and the Africa Centre For Tobacco Industry Monitoring And Policy Research (ATIM).
The report is based on the Framework Convention on Tobacco Control Article 5.3, which looks at how health policies are protected from or influenced by the tobacco industry, and what governments are doing to address tobacco industry interference.
___STEADY_PAYWALL___
“One of the crucial articles in the Framework Convention on Tobacco Control is Article 5.3, which states that parties to the treaty shall protect the public health policies from the commercial and vested interests of the tobacco industry. Public health is diametrically opposed to the tobacco industry’s interests. The two have nothing in common. It is in this context that the Tobacco Industry Interference Report is launched today.”
These are the words of Corné van Walbeek, a professor at the School of Economics, and the Director of the Research Unit on the Economics of Excisable Products (REEP). His research interests are primarily in the economics of tobacco control, and in particular, how changes in the excise tax on tobacco products can affect cigarette consumption.
“The tobacco industry tries to position itself as a force for good. It emphasises how many jobs it creates, how much money it generates for the fiscus and the contribution it makes to the country’s GDP. It wants to be seen as an industry like any other. The fact is that the tobacco industry is not like any other. It produces a product that causes death and disease. Every year, thousands of smokers die prematurely because they smoke. According to a study by the MRC, smoking was responsible for about 44,000 premature deaths each year around 2000,” he says.
Read also: Tobacco ban: Let’s call an end to this failed experiment
Playing our part in illicit tradeÂ
The banning of tobacco products during lockdown has been a hot topic in the media for the past four months. It even sounds as though the ban may be lifted soon, much to the delight of smokers everywhere. Studies conducted by REEP indicate that most smokers have been unable to quit smoking and have purchased cigarettes on the illicit market at highly inflated prices. In an interesting twist, Prof van Walbeek says that tobacco companies in South Africa have also been selling their products on the black market.
“The behaviour of the industry during lockdown has been nothing short of disgraceful. Various spokespeople for the industry have lamented that the illicit market has grown during this period. The fact of the matter is that tobacco companies have been actively selling in the illicit market. From our research, more than 90% of cigarettes sold during lockdown were of brands that were in South Africa before the lockdown, produced by known South African companies.”
The evidence of the smokers survey by REEP suggests that British American Tobacco (BAT) and multinationals have been hit hard by the sales ban, having lost their market share to local companies. Prof van Walbeek went on to say that it is ironic that FITA instituted the court case against Minister Dlamini-Zuma when their members have been the main beneficiaries of the sales ban.
Also read: Cigarette ban: Instead of running to IMF, govt should stop R4bn illicit trade – Yusuf Abramjee
“The multinationals are simply reaping what they sowed many years ago. Between the mid-1990s and 2010, the multinationals adopted a pricing strategy that was aimed at exploiting smokers by raising the retail price of cigarettes by much more than the increase in the excise tax. So, even though consumption was decreasing, the additional profit per cigarette more than made up for this. The result was that BAT and the other multinationals were making extraordinarily large profits. These profits attracted the attention of the smaller companies and the result is a more fragmented and a more competitive market,” he explains.
“British American Tobacco has always tried to portray itself as one of ‘the good guys’ and the local companies as ‘the bad guys’. Books by Johann van Loggerenberg and more recently by Telita Snyckers, shine a light on the dirty dealings of the tobacco industry and the multinationals in particular. In these books it is clear that BAT was at the forefront of state capture and the demise of the South African Revenue Service. There are no good guys in this industry.”
The Report Findings
The tobacco industry report chooses particular indicators to determine the level of tobacco industry interference and it then scores the country according to whether there was a high or low level of interference.
For 2019, South Africa’s score was 58, an improvement on the previous year’s score of 72. “A lower score means the country is doing better,” explains Savera Kalideen of the NCAS. “The report notes that improvements at SARS was the primary contributor to the improvement in the scores. There’s an indication that government has taken steps to strengthen tobacco control but more effort is needed to mitigate against tobacco industry interference.”
“I am happy to see that the tobacco industry interference score has decreased in 2019,” adds Prof van Walbeek. “That is progress and it’s attributed particularly to some positive developments at SARS. SARS plays a crucial role in ensuring that the tobacco industry is held accountable, especially with regards to taxes. They deserve all the support that they can get.”
