Much harm is done by the illicit tobacco trade

Create the perfect environment for your dairy cattle: Part 10

By Aliport Ngoma, General Manager Roland Tobacco Company

Zambia is famous for producing some of the best flavoured tobacco in the world. It is therefore no surprise that over 90% of Zambia’s tobacco is exported. This commodity is sent mainly to countries in Asia and Europe with little or no value addition. The annual tobacco production in Zambia is currently averaging 26 million kilograms, having reached a peak of 40 million kilograms in 2012. This commodity contributed 3% to Zambia’s total GDP. The three big manufacturers of cigarettes in Zambia are Roland Imperial Tobacco (RITCO), British American Tobacco (BAT) and Copperleaf Tobacco. Their total combined production capacity is 8 billion cigarettes per year, while Zambia’s cigarette consumption is estimated at 3 billion cigarettes per year. Unfortunately, there is another side to this coin ... The prevalence of illicit cigarettes on the Zambian market is a serious problem for all the stakeholders in the industry. It is estimated to be as high as 30% of the market, which is mainly driven by smuggling. This contraband is smuggled into the country without payment of duty and other forms of taxes, and neither are they checked for standards conformity. They are sold at a price below that of legitimate products, making them unfairly competitive. This is robbing the government of much needed revenue as well as posing a health hazard to Zambian citizens. The Zambian tobacco farmer is also severely impacted, and new investments are also hampered by this criminal activity. It is estimated that the Zambian Government loses between 50 and 100 million Kwacha worth of revenue from smuggled cigarettes per year. Sadly, illicit products are being sold freely on the Zambian market. Lack of compliance and enforcement of regulations on the market encouraged proliferation of illicit cigarettes. They are sold with no effective intervention from relevant authorities.

The illicit cigarettes are falling short of requirements for cigarettes such as: • Customs and Excise Act chapter 322, section 108A, which states that “any person who manufactures, distributes or imports cigarettes shall affix a cigarette tax stamp, in the prescribed form, to each individual package of cigarettes in such a manner as may be prescribed by the Commissioner

General. The stamp should be fixed on a pack in such a way that it breaks once the pack has been opened”. • The Public Health (Tobacco)

Regulations, 1992, which state that “no manufacturer, importer, distributor or retailer shall sell any tobacco product in a package unless such package is labelled in a clear, legible and conspicuous manner with a warning as follows:

“WARNING: TOBACCO IS HARMFUL

TO HEALTH”, which shall appear on both sides of the large surface area of the package printed in bold letters against a contrasting background; be in place where there is no risk of being damaged when the package is opened; and not be placed on a transparent wrapping or other wrapping paper used outside the packaging”. • The Zambian Cigarette Standard

DZS 303:2015 – Zambia Bureau of

Standards compliance and enforcement. National task forces which are established specifically to counter cigarette smuggling have proved futile, and action by the relevant authorities has been minimal. Strict enforcement and more severe punishment need to be applied if the Zambian tobacco industry wants to keep up with Zimbabwe, who is earning over US$ 1 billion per year from their tobacco industry. There is a desperate need for government to promptly put in place measures that will stamp out illicit cigarettes, increase revenue collection, support the local industry and job creation, whilst at the same time, making the Zambian product more competitive. Government should enact legislation to support and protect local companies that have invested heavily in the tobacco industry.

The following are some of the recommendations that will enhance growth of the sector: • Banning the importation of cigarettes, to be supplemented by the establishment of an effective national task force to combat cigarette smuggling. Border control should also be stepped up. Exceptions should be made for manufacturers who have invested locally and who are bringing in their own brands of cigarettes. • With already existing excess capacity of the three local manufacturers (8 billion cigarettes per year combined capacity versus 3 billion cigarettes per year consumed), it is unnecessary to import cigarettes. • Supporting the local industry will lead to job creation, growth, and local manufacturers will “recapture” volumes from the illicit market. • To protect the health of consumers in the country as some of the smuggled cigarettes are not subjected to checks for standards conformity and are of questionable sources of origin and manufacture. • Government will be required to make decisions that are in line with the aspirations of the World

Health’s Organisation’s Framework

Convention on Tobacco Control (WHO-FCTC).

It is important to raise awareness amongst the enforcers of the tobacco regulations, the distributors, vendors, and consumers on what constitutes legal versus illicit products.