How the tobacco law is affecting businesses

Simon Peter Komakech, a cigarettes retailer in Lira Town, is not a happy man. Komakech, 36, who has been dealing in the products for the last 12 years, says there has been a relative departure of customers because of recent developments surrounding the Tobacco Control Act. President Museveni assented to the Bill on September 19, thereby making it an Act.

“When news of the President assenting to the Bill reached our customers in Lira, it became a discussion in town, bars and radio. A month later, I started seeing a decline in demand for cigarettes from my shop. Before that, I used to earn about Shs450,000 a month from cigarette sales, now I get between Shs175,000 and Shs240,000 per month. Why should I be happy?”
Komakech’s story is not isolated but is shared by a number of other retailers in and beyond northern Uganda.
Even before the Act is published in the Gazette and implemented in full, small and big businesses are beginning to feel the pinch.

What the law says
Major highlights of the Act include a ban on smoking within 50 metres of public places, work places and public transport as well as sale of cigarette or tobacco products within 100 metres of these establishments.

It also bans the use of smokeless tobacco such as Shisha, Kuber and electronic cigarettes.
Furthermore, it bans all forms of aertisement, sponsorship and promotion by the tobacco industry and prohibits the sale of cigarettes to people under 21 years.

Whereas the law is welcome to a section of the population, a cross section of policy makers and stakeholders have been arguing about the implications, suggesting amendments to some sections of the Act to create a balance.

Vincent Mugaba, the head of public relations at Uganda Tourism Board is aware the World Health Organisation has repeatedly warned of the dangers of smoking.

However, this argument to some in the Tobacco value chain in Uganda such as rural farmers could be a smoke screen to a larger problem that could have been resolved with a few compromises.
Morris Candia, the spokesperson of the Tobacco Farmers Association in West Nile, says more than 60,000 farmers across the country will be directly affected.

“Some veiled sections of it (the Act) will affect us as farmers and other people involved in the tobacco value chain,” he says.

Tobacco consumption to drop
Without aertising, cigarette consumption is likely to reduce significantly. The heavy taxes will be transferred to the farmers in terms of low profits, increased costs of inputs which will further increase the costs of production hence putting farmers out of business.

“Some sections of the Act like smoking in public are good and we welcome them,” Candia says.
But his worry is the anticipated implementation of some of the harsh clauses such as smoking 50 metres away from the public.

Private sector
Candia’s fears are shared by Private Sector Foundation Uganda (PSFU).
Gideon Badagawa, the PSFU executive director says there are a number of unresolved issues that ought to be or have been discussed with the President before he signed the Bill.
“We collected these issues and took them to Parliament but despite these discussions, the law was passed due to pressure from civil society. ”

“If you look at Kampala,” Badagawa observes, “you can’t find a place that is 50 metres away from the public where someone can smoke from yet under the new law you are supposed to smoke 50 metres away from the public. The best option is to have designated places where smokers can go.”

While the health and environment concerns are recognised, Badagawa says there is need to look at the impact of the ban on key sectors such employment, exports, farmers and taxes.

“Jobs are few, the Shilling is struggling because of low exports, and tobacco, which is among the top foreign exchange earners, is being banned. Switching farmers from tobacco growing to something else will take a while. Farmers will lose employment and a source of income. This is what they do, what they live on, finding something else and adapting to it will be a challenge,” Badagawa says.

Retailers and wholesalers of tobacco, members of the Uganda Hotels Owners’ Association (UHOA) are equally unhappy.
“We are paying a much bigger cost than the smokers — people whom that law should be targeting,” says Jean Byamugisha, the executive director UHOA.

“As key stakeholders, we were not consulted and it is definitely going to affect us. We already have smoking zones but the 50 metres away rule from the premises has financial implications,” he says.

The association is unhappy that the designated smoking rooms in hotels are now irrelevant under the new law since they are not 50 metres away from the hotel as required.

“Our suggestions were to have clearly designated smoking and non-smoking rooms, restaurants and areas in the hotel so that we take care of all guests who visit our hotels,” Byamugisha notes.
“Very few hotels can afford to effect the 50 metre rule reservation and the rest because it requires hotels to have extensive space for their clients to smoke,” she adds.

Although the legislation is already an Act, Byamugisha says they will continue to lobby government to amend sections of the law with the view of finding a balance.

But she is worried that they will be much more affected because some hotel clients might chose to stay away because ambiguities in the law.

Although the law is not in favour of the association, the secretariat at UHOA has sent out information about the law to all members, explaining its merits and demerits and what they should do to comply.

About the Act
The Tobacco Control Act is the brainchild of Dr Chris Baryomunsi, the Member of Parliament for Kinkinzi East. It was first tabled in Parliament as a Private Members Bill in 2012 and later in February 2014.

The Act was created to regulate the use and trade in tobacco products to limit its impact on the health of its users and non-smokers.

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