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Press Release

FITA’s damages claim is ‘like a mugger suing his victim’

Thursday 16 June, 2022 – A THREAT by the Fair Trade Independent Tobacco Association (FITA) to sue Government for damages over the unlawful ban on lockdown sales is an outrageous ploy to keep looting honest South Africans, according to Tax Justice SA (TJSA).

“FITA members were the biggest beneficiaries of the ban when criminal networks took control of the market and made R100 million a day selling illegal cigarettes to desperate smokers,” says TJSA founder Yusuf Abramjee.

“Today, brands and labels owned by Zimbabwean tobacco giant Gold Leaf, which was a member of FITA during the ban, continue to dominate the market in an illegal price war that deprives the country of R19 billion tax revenue a year.

“FITA suing the Government for compensation over the ban is like muggers coming back to sue their victims.

“Instead of FITA playing hurt and issuing threats, South Africans should demand that Government fulfils its duty to collect taxes by taking the criminal cigarette barons to court and recovering the billions of rand in unpaid excise meant to build a better future for all.”

Studies by economic experts at University of Cape Town’s REEP unit found that FITA members  “benefited disproportionately from the sales ban”. It was “ironic” that FITA appeared to oppose the ban, they added.

On August 26 2020, FITA revealed it had reached an agreement with Minister of Cooperative Governance Nkosazana Dlamini Zuma to drop its legal challenge to the ban.

But after the Supreme Court of Appeal on Tuesday upheld a separate legal challenge by other industry players and ruled the ban was unlawful and unnecessary, FITA chairman Sinenhlanhla Mnguni said his organisation had been “vindicated” and would be seeking damages.

“For FITA to claim it is representing the legitimate tobacco industry is as outrageous as suggesting its members did not benefit from the tobacco ban,” said Abramjee. “As a lawyer, Mr Mnguni should know he’d be laughed out of court.

“For years FITA has been an apologist for manufacturers who continue to flood the market with tax-evading cigarettes. They played no part in defeating the ban and it’s opportunistic and underhand to claim they suffered from it.

“If FITA has any pretensions of credibility, it should explain what settlement it reached with Minister Dlamini Zuma over the ban and it should finally come clean about the antics of its leading ex-members Gold Leaf, Afroberg and Amalgamated Tobacco.

“They’ve created the world’s biggest black market in cigarettes which steals billions from our national coffers. They’ve become mega-rich in the process and they’re the ones who should be paying damages to decent, hard-working South Africans.”