Photo: Pixabay
Photo: Pixabay
When Jacques Pauw speaks, it’s certainly worth listening. The veteran investigative reporter – and acclaimed author – is no stranger to rocking the boat, and once again on Tuesday, he’s given us some interesting food for thought when it comes to the current cigarette ban.
The controversial policy has been a mainstay of lockdown, forcing smokers underground to get their tobacco fix. During a Think Big webinar with PSG, Pauw explained how an illicit market for cigarettes was formed more than 20 years ago, and weighed up the devastating effect the prohibition has had on the economy:
However, Pauw turned his attention to the ongoing court case between British American Tobacco and the government. He predicts that a protracted legal battle will put a strain on the way the company works with the state. Should the cigarette ban be extended for a longer period of time, it could put BAT under severe financial strain.
Considering that the government holds 43 million shares in the tobacco giant, any policy that could drive the group to ruin has the potential to wipe R30 billion from the state pension pot. This is, by no means, the likeliest route the cigarette ban could go down – but it remains an outside possibility:
“Quite simply, the government can’t afford to bring the big companies down: Looking at British American Tobacco (BAT) alone, the state can’t afford to be in conflict with this massive company, as the state pension fund holds about 43 million shares of BAT at a value of R27 billion.”
“In addition, the GEPF holds 23 million shares in Reinet, whose biggest investment is in BAT. If BAT closes down South Africa’s state pensioners will lose way over R30 billion as a result of a conflict the state cannot afford to be in.”
Jacques Pauw