6th May 2020 10:23
(Alliance News) - London and Johannesburg-listed British American Tobacco PLC on Wednesday pulled out of a legal battle the tobacco industry is waging to challenge South African government's ban on cigarette sale.
"Having considered the response from the government and noting President Cyril Ramaphosa's public statement of May 4, as a business, we have taken the decision not to pursue legal action at this stage but, instead, to pursue further discussions with government on the formulation and application of the regulations under the Covid-19 lockdown," British American Tobacco South Africa said.
In his Monday letter, Ramaphosa defended the reimposition of cigarette ban, saying it was a "collective decision".
On April 23, the president announced that the sale of cigarettes will be permitted.
But Cooperative Governance & Traditional Affairs Minister Nkosazana Dlamini-Zuma said, six days later, the new lockdown regulations reinstated the ban, backtracking on the president's announcement and prompting on Monday the Fair Trade Independent Tobacco Association, which represents tobacco companies including the BAT, file a case at the high court over the ban.
"We are convinced that by working together we can find a better solution that works for all South Africans and removes the threat of criminal sanction from 11 million tobacco consumers in the country," BATSA said in a statement.
Late last month, BAT said that following a strong operational performance in 2019, it expects to report earnings growth for 2020 despite the impact from Covid-19 being "difficult to predict".
The tobacco firm said it had made a strong start to the year, with positive volume growth benefiting from a rise in trade and consumer stocks, and a strong price mix.
Shares in the company rose 1.1% to ZAR690.0 each in Johannesburg on Wednesday morning, while its London shares were 0.2% higher at 3,014.00 pence.
By Artwell Dlamini; [email protected]
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