New smoking laws for South Africa – battle over jobs and lost profits

Proponents and supporters of the raft of new smoking law for South Africa have reflected on the public feedback on the bill so far, alleging that fear-mongering and misinformation have taken root to manipulate the public into rejecting the bill.

The new Tobacco Products and Electronic Delivery Systems Control Bill is currently with the provinces for public feedback.

The bill has been met with both support and vehement opposition, depending on the clauses being focused on.

Broadly, the bill aims to introduce the following:

• Indoor public places and certain outdoor areas will be determined to be 100% smoke-free.

• Ban the sale of cigarettes through vending machines.

• Plain packaging with graphic health warnings and pictorials.

• Ban on display at point-of-sale; and

• The regulation and control of electronic nicotine delivery systems and non-nicotine delivery systems.

While there has generally been support for bringing e-cigarettes and vapes under regulation, concerns have also been raised that some proposals – such as display bans and packaging changes – take matters too far.

There are also economic considerations at play.

Feedback from the first leg of public hearings indicated a deep sense of fear among informal traders in particular that some of the coming changes would deprive them of work opportunities and job creation.

These communities also raised concerns that other proposed limitations – like changes to packaging – would stymie the creative and advertising industry, costing even more jobs.

However, anti-smoking groups who are in support of the changes, say that these fears are unsubstantiated and reflect the work being done by the tobacco industry in its campaigns against the bill.

According to anti-smoking advocacy group, Protect our Next, the tobacco industry and other stakeholders who are rooted in the sector have overstated the economic impact of the new laws, while disregarding the social and health benefits they would deliver.

“We need to ensure that discussions are based on evidence and facts, not misconceptions and scare tactics perpetrated by an industry that puts profit before people’s health,” it said.

“This also highlights the critical need to educate the public on the harmful nature of tobacco and e-cigarette products, including tactics employed by the industries to oppose public health policies.”

On the economic front, the group said that smoking-related illnesses put a massive strain on the healthcare system – and the related costs far outweigh the tax revenues gained through the tobacco industry.

Tax revenues from the tobacco industry are estimated at about R13 billion – but this is far outweighed by the R42 billion (about 1% of the GDP) spent by the Department of Health on treating tobacco-induced illnesses, including costs related to premature deaths and lost productivity.

When it comes to jobs, the group acknowledged the fears raised by informal traders about job losses tied to the bill, and the loss of revenue by small businesses as a result of display bans and packaging changes, but said that the fears were unsubstantiated.

Professor Lekan Ayo-Yusuf, Director of the National Council Against Smoking (NCAS) and Head of the School of Health Systems and Public Health at the University of Pretoria, said the tobacco and e-cigarette industries often exaggerated the negative economic and employment impacts of tobacco control and tax policies to oppose any regulations that might reduce their sales and profits.

However, studies show that a decrease in tobacco expenditure is usually associated with an increase in expenditure on other goods and services in the economy, creating jobs in other sectors.

“The industry mostly passes on the increased taxes to the consumers; hence, any increase in price does not directly impact their profits, as reflected in dividends consistently paid out to their shareholders year after year.

“If people stop smoking, the revenue from excise taxes on tobacco and related products doesn’t disappear, they spend it on other things instead. This could then help other industries grow and create healthier jobs and a more sustainable economy,” he argued.

The anti-smoking groups also argued that the number of jobs dependent on tobacco has been decreasing in most countries mainly due to advancements in farming and manufacturing processes to maximise profit for shareholders – not from the impact of tobacco control laws or increases in taxation.

Source: BusinessTech