Latest news with #CGCSA
IOL News
24-06-2025
- Business
- IOL News
Action taken against Leaf Services contract, potentially safeguarding bread prices in SA
In an era where economic pressures are acutely felt, the decision by Minister Steenhuisen to revoke the Leaf Services contract is a shining example of government responsiveness to industry concerns, potentially safeguarding the accessibility of affordable bread for millions of South Africans. Image: Simphiwe Mbokazi / Independent Newspapers. In a significant move that has resonated across the South African baking industry, the Minister of Agriculture, John Steenhuisen officially revoked a contentious contract with Leaf Services, a decision met with relief from stakeholders including Pick n Pay, the Consumer Goods Council of South Africa (CGCSA), Grain SA, and the Chamber of Baking. The original agreement, proposed in 2016, faced fierce opposition from various parties who argued that the appointment of Leaf Services would impose unnecessary financial burdens on an industry already grappling with slim margins. The CGCSA successfully challenged this contract in court in 2021, but the Department of Agriculture had previously submitted what Pick n Pay's CEO Sean Summers described as a 'new equally unreasonable business model,' which continued to raise eyebrows. Summers shared concerns regarding the appointment of an assignee that forced the industry to fund a service that had historically been provided for free by the Department. 'We accepted and supported that pan bread was legally regulated under the APS Act, yet we couldn't understand the need for Leaf Services at all,' he said. The CEO's concerns resonated a sentiment shared within the industry that compliance with food safety regulations has always been under the purview of the producers, millers, and retailers. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad loading In his detailed critique, Summers pointed out that the proposed inspections by Leaf Services were not focussed on food safety but merely on the composition of the bread. 'The methodology proposed would have necessitated three annual inspections at each of our 920 stores. This would have led to duplication in sampling, raising significant logistical and financial concerns,' he said. He highlighted that over the years, Pick n Pay successfully baked and sold billions of loaves of bread without encountering compliance issues, showcasing a longstanding commitment to quality. The imposition of such a stringent inspection regime would add an estimated R10-million a year to their operational costs, a burden Pick n Pay deemed unwarranted. Meanwhile, the potential impact on wider industry members was equally alarming. Grain SA estimated that had the proposed R4-per-ton fee been implemented as intended in 2016, it would have cumulatively cost its members more than R600-million by now. Such expenses would unduly contribute to increasing the price of staples, particularly concerning given the economic strain many South Africans face. Summers concluded with a strong affirmation of the decision to revoke the contract, expressing gratitude that the Minister listened to the collective concerns from the industry and took decisive action that prevented an unconscionable waste of resources. 'This decision not only protects our industry but ultimately ensures that basic bread remains affordable for those who need it the most,' he said. BUSINESS REPORT Visit:
IOL News
10-06-2025
- Business
- IOL News
Industry says scientific innovation could reshape the tobacco landscape in South Africa
South Africa ranked 60th out of 158 countries, 'indicating moderate resistance to illicit trade, but with notable vulnerabilities in areas such as supply chain control and enforcement' capacity. Image: Supplied The government in South Africa and elsewhere on the continent has been urged to consider scientific evidence and innovation when coming up with policies and regulations for the tobacco industry. As experts highlight the dangers associated with tobacco consumption, players in the industry are pushing for the adoption and 'proper regulation of smoke-free nicotine' products. Industry players are basing their approach on scientific innovation and data pointing to tobacco harm reduction through adoption of what they are calling "safer nicotine products" that are smoke-free. This comes at a time when smoking and tobacco consumption is on the increase across Africa, sharply contrasting other developed regions where trends are pointing to a decline in smoking. Nonetheless, Branislav Bibic who is Philip Morris International vice president for Sub-Saharan Africa, on Tuesday said tobacco consumers in South Africa 'are following global trends as they are embracing new' categories that are smokeless. 'Our experience in South Africa is that once these products are made widely available at an accessible price, and consumers are provided accurate information about their benefits, we see a significant switching from cigarettes to smokeless products,' Bibic said at the Technovation Summit in Cape Town. 'Our estimates in South Africa show that already around 20% of the South African legal cigarette market has been replaced by non-smoking products.' Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad loading Among the sharp differences between the government of South Africa and the value chain industry for tobacco are issues related to the proliferation and best practices in addressing illicit trade. The Consumer Goods Council of South Africa (CGCSA) has criticised the Tobacco Products and Electronic Delivery Systems Control Bill for overlooking 'key realities' on the ground, arguing that the legislation has to stamp out illicit trade in goods and substances. In oral presentations to the parliamentary portfolio committee this month, the CGCSA - which represents companies spanning consumer goods, retail and services sectors - said the tobacco products legislation currently lacks measures to root out the 'unchecked black market and its impact on legal industry value chain and public revenue' flows. Although in South Africa there is currently contested debates over the Tobacco Bill that seeks to bundle together regulation of tobacco cigarettes and smoke-free nicotine products, PMI believes that it will be easy to roll-out these products elsewhere across the continent. This is, however, dependent on these markets putting in place clear and conducive regulatory frameworks. 'Africa can address the smoking epidemic. Let's choose innovation and science and we can help millions of Africans move over to a future free of smoke,' Bibic said.
The Herald
05-06-2025
- Business
- The Herald
Proposed smoking regulations ignore 'illicit trade crisis', says consumer body
'The bill also draws an unfair distinction between the formal and informal sectors. The informal sector is not held to the same compliance standards and that imbalance is not fair. We ask that this gap be closed by ensuring that all businesses, formal or informal, are required to hold the necessary licences, registrations and compliance documentation.' CGCSA proposed that separate consultative legislative processes should continue. 'Illicit trade in tobacco has increased by between 60% and 70%, and we are demanding urgent prioritisation of this issue, because what we are witnessing is a full-blown crisis,' Tyikwe said. She said the value chain faced mounting pressure from the bill. 'While it aims to improve public health outcomes through stronger tobacco control, it also carries implications for the entire tobacco and nicotine value chain. The total farming yields have declined, worsened by the 2020 lockdown, which reduced employment from 11,000 to 6,000 workers, who are supporting at least 80,000 dependents. 'These farmers contributing to the national fiscal without government aid exemplifies the value chain's fragility. Retailers must also reconfigure points-of-sales at significant costs to conceal products, while specialists, tobacconists and vaping stores face customer loss. Informal traders, such as spaza shops, lack the infrastructure to comply, facing criminalisation and exclusion from legal trade.' CGCSA legal, regulatory and sustainability executive Neo Momodu said the statement constantly being made was that business wanted to make a profit.
TimesLIVE
05-06-2025
- Business
- TimesLIVE
Proposed smoking regulations ignore 'illicit trade crisis', says consumer body
South Africa's proposed smoking regulations ignore the country's 'illicit trade crisis', the Consumer Goods Council of South Africa (CGCSA) said on Tuesday. In its parliamentary submission to the portfolio committee on health, CGCSA said the Tobacco Products and Electronic Delivery Systems Control Bill was a 'plug-and-play' import of foreign models that completely disregard the illegal production, smuggling, distribution and sale of tobacco products in the country. It said while the council, which represents more than 9,000 South African companies, supported evidence-based tobacco control to advance public health, it was concerned about the 'unintended consequences, particularly economic harm and the likely expansion of the illicit tobacco trade, which is estimated to cost South Africa at least R18bn per annum'. CGCSA CEO Zinhle Tyikwe said the bill adopted a one-size-fits-all approach which did not account for South Africa's unique context. An illicit tobacco market now accounted for an estimated 60—70% of sales. 'We are seeing shortcomings in the bill, particularly where there is a 'plug-and-play' from other foreign models that may be similar to South Africa but are not South African. Here we are in the middle of an illicit trade crisis, not just in tobacco but also in pharmaceuticals, fraud and liquor. As an industry, we deal with issues that are critical, because if people consume alcohol, food or pharmaceutical medicines that are illicit, there is a real risk that people will die. We take our work seriously,' said Tyikwe
The Citizen
30-05-2025
- Business
- The Citizen
Consumer Goods Council calls for urgent expansion of zero-rated foods
Only low-income consumers will understand the difference a few rands make if more food items are Vat zero-rated. The Consumer Goods Council is calling for an urgent expansion of the list of zero-rated food products to ease the cost burden on poor households. More food items were added to the zero-rated list when there was a Vat increase on the cards, but when the increase was scrapped, the food items were removed. In response, the Consumer Goods Council of South Africa (CGCSA) addressed the Parliamentary standing committee on finance this week, calling for the National Treasury to urgently reintroduce the expansion of the list of zero-rated basic food items in the draft tax legislation expected to be published soon for public comment. Neo Momodu, CGCSA executive for legal, regulatory and stakeholder engagement, submitted that in a country facing food insecurity, expanding the list of zero-rated food products, will ensure that poor households are able to afford more healthy and nutritious food that they would otherwise not be able to buy. She said while the CGCSA welcomed the decision not to increase Vat, this had unfortunately led to the withdrawal of the minister of finance's decision to expand the basket of Vat zero-rated food items to ease the burden of food costs on the poor and vulnerable. ALSO READ: Godongwana cuts zero-rated food basket in Budget 3.0 Vat zero-rated foods in first and second versions of Budget In his first and second national budget statement for 2025 the minister proposed expanding the basket of Vat zero-rated food items to include canned beans and peas, dairy liquid blends and certain organ meats (offal) from sheep, pigs, goats and poultry. However, after the Vat increase reversal statement of 24 April 2025, the National Treasury announced that 'the decision not to increase Vat means that the measures to cushion lower income households against the potential negative impact of the rate increase now need to be withdrawn and other expenditure decisions revisited'. Momodu said this decision is particularly concerning for the CGCSA and its members because many South Africans are hard hit by the cost of living and the zero-rating of the additional products would have gone a long way to not only cushion consumers but also improve healthy eating and healthy lifestyles, as well as improve food security. ALSO READ: Zero VAT rating of products does not help poor people – expert Scrapping of Vat increase helps, but consumers need more zero-rated items 'Although there is no doubt that the decision to retain the Vat rate at 15% benefits consumers, this 'win' for consumers must be properly unpacked. It has merely avoided one of the potential additional direct costs that consumers carry by maintaining the status quo. This 'win' did in fact not create any positive means to reduce the existing burdens on financially vulnerable households. 'Maintaining the status quo is simply not enough to provide any tangible difference for vulnerable households or manifest the socio-economic obligations on the government to deliver food security to all consumers, especially protected groups that include women, children and disabled people. 'It would be an unfortunate outcome if the traction gained to expand the list of zero-rated items were to be lost due to seemingly erroneous and misplaced ties between expanding the zero-rated list and further tax increases. These two things are mutually exclusive and each bears interrogation on their own merits,' Momodu said. ALSO READ: Budget speech: VAT increase decision not made by someone who knows hunger Retailers try to help, but more food must be zero-rated She pointed out that the CGCSA's food manufacturer and retail members have and continue to find ways of ensuring that basic food items are sold at competitive prices, aware of the impact of food costs on their consumers, particularly the poor and disadvantaged. 'Therefore, expanding the basket of Vat zero-rated food items would have been beneficial for consumers.' Momodu said the Treasury should find ways to ease the untenable financial strain that South African consumers, particularly lower income households, face due to the cumulative impact of above inflationary increases in taxes, levies and costs of living generally.
