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Tobacco retailers believe restrictions will damage small businesses

Tobacco retailers believe restrictions will damage small businesses

Retailers of tobacco products believe the Department of Health’s proposed regulations to limit the point of sale display of tobacco products will not stop people smoking, but will undermine their ability to trade. They have called on the new Minister of Small Business Development, Lindiwe Zulu, to intervene.

The proposed regulations will limit the size of the display area to 4 square metres for tobacconists and 1 square metre for all other retailers. There can only be one sales unit per premises. This includes all cigarette brands as well as pipe tobacco, snuff, snus and any other tobacco related paraphernalia. The regulations will affect both retailers and wholesalers and failure to comply could result in a fine of up to R1m.

Local distributors of tobacco products, Clippa Sales and OTP Distributors both say their customers are deeply concerned.

Alex Jacovides, MD of Clippa Sales says, “The majority of our customers are small family owned businesses and the implementation of the proposed regulations will place greater pressure on these retailers who are running legitimate operations.”

Jampie Vlok, a Director at OTP Distributers says, “Our customers have a right to display their products and their customers have a right to choose what to purchase. The limited space will limit the range of products and undermine these rights.”

Yusuf Safeda, owner of a large 711 in Athlone, near to Hanover Park, has run his family-owned store for over 17 years. Much like most other small store owners, he estimates that between 10-12% of his sales are tobacco products.

Safeda says, “The regulations are ridiculous. It’s not going to stop anyone smoking, but it’s going to restrict customer choice because we’ll only be able to display a few brands and products. This is not good for smaller brands and will simply block these out the market. The government talks about supporting small business – yet these regulations will damage small business in so many ways.”

He adds that it’s more important for government to give people proper healthcare. “The Government should get its priorities straight – like sorting out the hospitals and clinics in disrepair.”

‘Just like the ban on tobacco advertising, these display restrictions will not stop people smoking. Even if cigarettes are completely hidden, people will still smoke. I see the greatest negative impact being on smaller brands. It’s tough enough for them as it is; this is going to be a bridge too far.”

Tobacconists ask for exemption - like in UK

Saeed Khot, a specialist tobacconist who owns a small store, Brands & Blends in the Milnerton Mall says the majority of his income comes from tobacco products and the regulations would destroy his business.

“People come into my shop to buy tobacco products. To restrict the display of tobacco products in a tobacco shop to 4 square metres doesn’t make sense. I believe that tobacconists should be exempt from these regulations.”

Nishka Nana who has run his specialist tobacconist store Spice 4 Life in the Bothasig Mall for 16 years agrees with Khot.

“An exemption for tobacconists makes sense. That’s what they have done in the UK.”

Nana says his business is already under pressure from competitors who sell illicit cigarettes.

“Many of my regulars are starting to go elsewhere for R10 pack cigarettes and since I only sell compliant legal products, there is no way I can compete.”

Arno le Roux who owns specialist tobacconist business, Cigarettes4Africa, supports the call for an exemption.

“This is a small margin, large volumes business. It’s going to be chaos if my display area is restricted to 4 square metres. We won’t be able to pack into the display areas quickly enough.”

Le Roux says, “It’s not fair. I am a legitimate tax-paying businessman. I employ people. I work extremely hard to put food on the table for my family and the government is proceeding without consulting the very people it effects. Where’s the proof these regulations will stop people smoking? The only way you will stop people smoking is through education.”

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