Press release FITA 12 December 2018

Press release – FITA – for immediate release
Over the last few months multinational tobacco companies have embarked on an aggressive
media campaign on the back of the controversial and misleading IPSOS report highlighting,
amongst others, the negative effects of the illicit trade in cigarettes on the economy and the
people of South Africa. It is common knowledge that we, as the Fair-Trade Independent
Tobacco Association (“FITA”), have long questioned the veracity of the aforementioned
report.
Our suspicions in relation to this report and its accuracy have been further increased as we
have over the course of the last few days been handed, by a source, audio recordings of
telephone conversations, e-mails, and WhatsApp messages between various parties including
inter alia representatives of the Tobacco Institute of Southern Africa (“TISA”) and IPSOS,
which correspondence indicates that there are a number of irregularities with how the IPSOS
reports was compiled. The contents of the documents and recordings received state inter alia
the following:

1. IPSOS was contracted by TISA for purposes of the report but allegedly contracted the
work out to another company, namely Freshly Ground Insights Africa (“FGI”). FGI then
allegedly contracted a further private unregistered individual, one Gwendoline
Hector, to conduct the research. Hector was paid R100.00 per interview for both the
first and second wave of the survey. Hector then further contracted a large number of
unemployed individuals to conduct the survey and promised them payment in the
amount of R40.00 per interview;

2. The people employed by Hector appear to have been unqualified to conduct these
interviews, and our sources have advised us that many of them did not have a good
command of the English language or any other languages that would equip them to
properly interview vendors and other traders who were the subjects of their
interviews;

3. The interviewers were given strict instructions by Hector to interview only black
African vendors and traders for purposes of the report;

4. We further have in our possession emails from TISA to our source confirming that they
are aware of the issues raised in numerous emails by our source and are in fact
conducting an internal investigation on the allegations as raised in his emails;

5. There’s an e-mail from FGI, who were subcontracted by IPSOS, showing that there was
indeed a dispute and they were trying to silence our source by settling the dispute
quietly and making the matter “go away”. The Managing Director of FGI even went to
the extent of flying from Johannesburg to our source’s residential home in Cape Town
to try settle the issues raised by our source in order to avoid causing any
embarrassment to TISA. In addition to this, our source was requested to write to TISA
and advise them that any issues in relation to the report had been settled amicably
between the parties, despite this not being the case;

6. In the interim, a third wave of surveys are now being conducted by Hector and her
contracted interviewers despite TISA having given the public at large the impression
that their report was compiled by a reputable company like IPSOS. This in addition to
the fact that the interviews employed by Hector are not suitably qualified to do so;

7. We have further been reliably informed that only a small percentage of the
interviewers have actually been paid anything for the work done by them on behalf of
TISA through the unregistered contractor, this despite them being the ones who
actually did the research whilst IPSOS was allegedly paid large amounts of money for
merely playing the role of agents in this entire transaction.

As an organisation we are not shocked by these allegations as they are merely a continuation
of the underhanded tactics TISA and its members are prepared to resort to to prevent
transformation of the tobacco industry, which industry has for centuries been dominated by
the same foreign owned multinationals.
We were as early as June of this year made aware of a particular “strategy” that had been
circulated by TISA. Amongst other things, this “strategy” specifically states that the intention
is to “target” FITA members, and to do so by among other things “Securing regional and
national front page headlines” and to “influence the media…” We had earlier this year
cautioned the media to be aware of the fact that they are being targeted as mediums to carry
propaganda as part of a “strategy” that is designed to malign FITA members.
TISA, via its #TakeBackTheTax campaign has been at pains to point out losses to the fiscus,
yet remains silent on the issue of Base Erosion and Profit Shifting (BEPS) tactics implicating
TISA members worldwide and specifically in developing states in Africa. Studies conducted by
the Thabo Mbeki Foundation on Illicit Financial Outflows from South Africa and African
countries show clearly how BEPS is part of this problem of billions flowing out of African
economies. Multinationals are the only companies that can engage in these questionable
practices. Perhaps TISA can enlighten the public as to why the IPSOS study did not consider
all ways in which losses to the fiscus manifest, particularly if the process was intended to seek
ways to “take back the tax”? Why stay silent on this particular issue? Perhaps TISA could
enlighten the public on the billions that have flowed from South African shores that are
attributable to its members?
This phenomenon applies to TISA’s biggest member, British American Tobacco, which is the
subject of an investigation by the United Kingdom’s Serious Fraud Office. They have been
implicated in a host of allegations, including racketeering, bribery, and corruption, money
laundering and industrial espionage. Their investigative reports commissioned both locally
and in the UK into the aforementioned allegations and conducted by law firms Norton Rose
Fulbright and Slaughter & May in 2016 have yet to see daylight.
It is really about people living in glass houses and black pots and kettles. There should be no
need to pay money to public personalities who claim to be anti-crime activists. Surely TISA
cannot miss the irony in this sort of practice? Perhaps TISA can ask their paid activists to also
inform the public about BEPS practices and the evidence in the public domain which
implicates British American Tobacco. Maybe these paid activists can do the South African
public the favour of having a direct conversation with you to convince you why the release of
these reports are in the interests of justice?
Perhaps, while TISA contemplates doing so, it should also publicly release its planned
campaign documents, especially those that sought to “influence the media to get headlines
across the country”, and to further “influence government agencies”? These themes and
approaches appear awfully similar to the allegations of State Capture we have seen over the
last few years.
FITA would again like to urge journalists to be aware of these tactics, particularly in light of
the new information received in relation to the IPSOS report, and to resist being abused for
ulterior purposes. FITA is perfectly aware of the problems faced by the tobacco industry as a
whole and urges the media to consider all aspects that lead to losses to the economy and to
not become the public relations arm of some.

Issued by the Fair-trade Independent Tobacco Association: 12 December 2018
For queries kindly contact Monique Vogel t: 072 720 7919; e: Monique@fita.co.za

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