The Great South African Smokeout.
Not surprisingly, the law has British American Tobacco, the world's second largest tobacco corporation, frustrated. In 1999, BAT gained a monopoly in South Africa when it merged with Rothman's International, then the fourth largest tobacco company in the world, and its market share skyrocketed from 10 percent to 95 percent.
Not so long ago it was the tobacco industry that called the shots in South Africa. The wealthy Rupert family founded its Rembrandt tobacco company in 1948, the same year the National Party -- which established the apartheid regime -- came into office, and the company benefited from a long and close relationship with the government. Economic sanctions and the limited involvement of multinational tobacco corporations enabled Rembrandt to gain a dominant position in the market.
Prior to the end of apartheid, a third of all South Africans smoked, excise taxes were low, and there were few tobacco control measures.
The end of apartheid and democratization was an important first step in the South African government's shift away from support for the tobacco industry.
Founded in 1991, the Tobacco Action Group, a coalition consisting of the National Council Against Smoking, the Cancer Association of South Africa and the Heart Foundation of Southern Africa, helped raise public awareness about smoking hazards and drove tobacco control to the forefront of the political agenda.
On World No Tobacco Day (May 31) 1992, Nelson Mandela issued a statement on tobacco control.
In 1993, South Africa passed its first Tobacco Products Control Act, just before the country's inaugural democratic election. The 1993 Act provided for: the control of smoking in enclosed public areas; the labeling of tobacco packages and advertisements with health warnings and the nicotine and tar content; and the prohibition of sales to children under 16.
The new Minister of Health in democratic South Africa, Dr. Nkosazana Zuma, was instrumental in putting tobacco control high on the government's agenda. Crucially, says Yussuf Saloojee, executive director of the National Council Against Smoking, Zuma was a political "heavyweight" who had Mandela's ear and could push her agenda effectively.
In 1994 Zuma strengthened the 1993 Act, requiring stronger health warnings and restricting smoking in government buildings and in some private businesses.
The government also moved to increase cigarette taxes. Between 1970 and 1990, real excise tax rates fell 82 percent, leading to a 31 percent decrease in retail cigarette prices. Cigarette consumption rose 139 percent during this time. Between 1994 and 1999, however, real excise taxes rose 149 percent, real cigarette prices went up 81 percent, and tobacco consumption went down 21 percent.
Although overall smoking rates declined, smoking rates among coloreds (those of mixed race) and blacks rose, due to increased industry targeting of these populations.
Even with the more stringent regulations, the industry operated with a high degree of latitude. No health warnings were required during cigarette advertisements on radio, perhaps the most important media in South Africa. The industry continued to distribute free cigarettes in places frequented by young people and to invest heavily in sports and cultural event sponsorships. The industry also lit cigarette billboards in such a way as to obscure the health warnings. And smoking in public places remained largely unregulated.
CLEARING THE AIR
Concerned that radio was exempt from the health warning regulations, the National Council Against Smoking brokered an arrangement in 1994 with the National Association of Broadcasters that gave the council free air time to broadcast health messages. These health ads helped shift public opinion strongly in favor of tobacco control regulations. In one poll, in 1998, 90 percent of nonsmokers and 70 percent of smokers supported a stronger ban on smoking in public places.
Strong public backing gave Health Minister Zuma the political room she needed to press a far-reaching legislative agenda. Assisted by public health groups, the government proposed one of the world's strongest tobacco control laws.
Blanche Pitt, director of the Health Promotion Directorate at the National Department of Health, who worked on the Amendment Act for 18 months, and Saloojee agree that the new amendment act was a wonderful "team effort."
The revised law completely bans the advertising and promotion of tobacco products, including event sponsorship by tobacco companies; prohibits the free distribution of tobacco products and the receipt of gifts or cash prizes in contests, lotteries or games; limits smoking in public places, including the workplace; provides for the prescription of maximum yields of tar, nicotine and other constituents in tobacco products; and increases fines for violations.
"The tobacco control community tried to create a gap between us and the government, to limit our access to the process. It's unacceptable," says Abrie du Plessis, spokesperson for BAT-South Africa, blaming organizations like the National Council Against Smoking for pitting the government against the industry.
"We want to have a constructive relationship with government," says du Plessis, "It's almost as if the culture of smoking is being blamed on corporations, as if smoking is a phenomenon created by multinationals and perpetuated by advertising. We don't believe this, because before multinationals people smoked."
Saloojee says that the industry made the "usual noises" when faced with increased regulations, primarily that the laws were too strict and would carry a high economic cost. The industry argued that the regulations would hurt tourism, especially from Germany, and lobbied the Ministry of Tourism for support. The industry also claimed that the ban on smoking in public places would adversely affect small businesses unable to afford the necessary structural changes required by the law.
Publicly, BAT says it does not expect the new regulations to have an impact on its business in South Africa. "The severe restrictions on smoking in public places may have a small impact on sales volume because the opportunity to smoke becomes less, but we don't expect them to have any impact on sales," says du Plessis.
But BAT appears worried. Because BAT has a virtual monopoly over the South African tobacco market, it is constrained from malting the standard arguments against the ad and promotional ban. The tobacco industry has long argued that companies advertise to win market share, not to influence nonsmokers to take up the habit.
With BAT forced to sit on the sidelines, groups such as the Freedom of Commercial Speech Trust, representing the media and marketing industries, the South African Chamber of Business, the American Chamber of Business and the Council of South African Banks, fought against the proposed advertising ban.
The industry also influenced the Food and Allied Workers Union (which represents cigarette manufacturing workers), international "experts," and sports and cultural recipients of tobacco sponsorships to testify against the bill.
THE INDUSTRY OUTLOOK
Success is sweet, but South African tobacco control advocates are seasoned enough to know how adept the tobacco industry is at circumventing laws. In the past, the tobacco industry has exploited loopholes in the law and has often disregarded it altogether.
Saloojee suspects that BAT will seek to work around the advertising ban with direct marketing efforts. Before the tobacco control act became law, BAT held a nationwide competition. The prize was a trip into space on the first commercial spaceship, redeemable within the next two years -- or a cash prize. The real purpose of the competition, says Saloojee, was to build up a database of names that the industry can target in the future.
Pitt's main concern is the industry's targeting of young people. She recently received a report of university students receiving Brown and Williamson's packages in the mail, complete with cigarettes, a lighter and sunglasses. Pitt said that she is "on guard" for alternative strategies.
The industry may also opt for low-key strategies to market their wares. For example, says Saloojee, "BAT has organized so-called 'word of mouth' parties, where one can ring up a telephone number, pick up a ticket, go to a certain venue, and hear a British band at no cost. The purpose is to create a trend, a buzz."
Indeed, as Business Day reported, tobacco companies are turning to new "guerilla" marketing techniques to get around the new regulations. The Independent Tobacco Corporation sponsored an online lifestyle magazine, Inhalex, in conjunction with the launching of two new cigarette brands, Matrix and Rivas Park.
Tobacco control advocates are also concerned that stronger legislation in South Africa will encourage the industry, already manufacturing more tobacco than the country consumes, to market more aggressively in other countries, especially in Africa. For this reason, they are pushing for a strong World Health Organization Framework Convention on Tobacco Control, currently being negotiated in Geneva.
BAT spokesperson Abrie du Plessis says that anti-tobacco groups never seem to be satisfied. "The incredible thing is that anti-tobacco groups are already preparing for the next round of anti-tobacco legislation. That's the way it goes in activism -- it never stops."
Anna White is coordinator of Essential Action's Global Partnership for Tobacco Control.
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|Date:||Jan 1, 2001|
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