Batsa, a unit of British American Tobacco (BAT), the world’s second-largest cigarette producer, said on Friday that it was suing the government because the ban on the sale of tobacco sales was threatening the survival of the legal tobacco sector and the livelihoods it directly supported.

The company charged that the ban on tobacco sales had succeeded only in growing a nationwide illegal industry at the direct expense of law-abiding businesses, citizens and taxpayers.

It asserted that the cigarette sales ban was a drain on the fiscus, with the National Treasury losing R35 million($2m)revenue in excise taxes every day.

“Batsa has long argued that the banning of a legal product will have dire consequences – driving millions of smokers to the illicit market, robbing the government of much-needed excise tax contributions, undercutting tobacco control regulations, encouraging criminal behaviour and threatening thousands of jobs,” the company said.

Mlungisi Mtshali, a national spokesperson for the department of Co-operative Governance and Traditional Affairs, said on Friday that the department had not yet received court papers from Batsa.

Mtshali said the department was also facing legal action from the Fair-Trade Independent Tobacco Association (Fita).

“This (Batsa legal action) is a continuation of legal action facing the department in terms of the ban on the sale of cigarettes,” said Mtshali.

Fita chairperson Sinenhlanhla Mnguni approached the court last month for an order to lift the prohibition on the sale of tobacco, by striking the provisions in the regulations.

Last month, Batsa announced that, as it believed in working with the government, it would find a better solution, and had decided not to pursue legal action against the government. It had said it would instead pursue further discussion on the application of lockdown regulations.

However, the company said on Friday that despite constructive engagements with the government since the ban on tobacco came into force, the company had received no formal response.

Batsa said it had also not been included in any of the government's consultation processes so far.

Johnny Moloto, Batsa’s head of external affairs, said under level 3 consumers would once again be able to buy all the products that had been restricted under levels 5 and 4 of the lockdown, except for tobacco products.

“The government has instead decided to maintain the ban on tobacco products under the guise of limiting the spread of Covid-19 while allowing all other previously banned consumer products to go back on sale.

“Given the situation, and the lack of any response from the government, despite our ongoing efforts to engage with them, we are now commencing urgent legal proceedings,” Moloto said.

Batsa said it had received support from Japan Tobacco International and groups and organisations representing the tobacco value chain, including consumers, tobacco farmers and retailers.

---BUSINESS REPORT--