Liquor and Informal Traders Urge Parliament to Reconsider Tobacco Bill’s Impact on Livelihoods

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Organisations representing liquor traders and informal businesses across South Africa have voiced strong opposition to the proposed Tobacco Products and Electronic Delivery Systems Control Bill (B33-2022), citing significant concerns about its potential to devastate small and micro-enterprises, particularly within the township economy. Submissions from the Gauteng Liquor Traders Association (GLTA) and a presentation from SIP Liquor to the Parliamentary Portfolio Committee on Health highlight the impracticality of several key clauses and warn of increased illicit trade and job losses. The Limpopo Small Medium and Hawkers Association also presented similar concerns.

Key Concerns Raised by Liquor and Informal Traders:

• Ban on Indoor and Outdoor Smoking: The GLTA argues that the bill’s restrictions on smoking distances from windows, ventilation, and entrances are “totally unworkable in a township environment” where space is severely limited. They point out that many members invested in designated smoking areas under previous legislation and would now face additional costs and hardship. Furthermore, forcing patrons to find distant outdoor smoking areas in townships raises safety concerns regarding muggings, rapes, or worse. They suggest an exemption for some outlets to retain the 25% floor space for smokers.
• Policing Patrons: Both the GLTA and informal traders expressed concern that requiring establishment owners to police their patrons will damage customer relationships and is impractical for small businesses with limited staff.
• Corruption and Criminality: The GLTA warns that impractical laws could create more opportunities for corruption and bribery by law enforcement officials. Informal traders echoed this, stating that unreasonable enforcement could lead to extortion.
• Penalties: Concerns were raised about the severity of penalties, including imprisonment for smoking in banned areas (3 months to 10 years), displaying tobacco products (10 years) and selling loose cigarettes (10 years). These are viewed as “absurd” and disproportionate given the practical challenges faced by traders.
• Ban on Product Display and Vending Machines: The bill proposes a ban on displaying tobacco products, requiring them to be hidden and only available upon request. Traders argue this will complicate sales, add unnecessary administration for small business owners, and could encourage illicit trade. The ban on vending machines is also criticised for impacting income and lacking a direct link to increased smoking. Informal traders highlighted their lack of infrastructure to “hide” products like formal retail.
• Ban on Single Stick Cigarettes: Clause 4(3)(c) of the Bill bans the sale of individual cigarettes. This is a major concern for informal traders as single stick sales are “central to our business model and customer base”. They state that many customers cannot afford a full pack and that this ban will force them to buy more cigarettes, switch to cheaper illegal brands, or have less money for necessities.
• Online Sales Prohibition: SIP Liquor specifically highlighted the bill’s complete ban on selling or distributing tobacco products via postal services, courier services, or the internet, carrying a penalty of up to 15 years imprisonment and a fine. SIP Liquor, an online liquor retailer that also sells tobacco in-store, argues this is an “outdated regulatory approach”. They advocate for allowing online sales under regulated conditions, emphasizing their robust age verification systems (double age verification and physical ID checks on delivery) which they claim exceed those of brick-and-mortar retailers.
• Socio-Economic Impact: The organisations collectively argue that the bill will disproportionately penalise the poor and informal traders, threatening their livelihoods. They highlight that informal trade is a cornerstone of the country’s socio-economic development and supports numerous families.

Both the GLTA and SIP Liquor have requested the opportunity to make oral presentations to Parliament to further clarify their concerns and propose less restrictive means to achieve the bill’s intended purpose. The GLTA has also appealed for an extension of the comment period to allow for appropriate consultations with their members.