Dirty Tobacco. Telita Snyckers
TAFELBERG
Foreword
by Rob Rose
A devastating playbook dating back decades
What you’ll read in these pages is nothing less than an indispensable part of the canon of work that explains the secretive role that tobacco played in warping South African society over the most traumatic decade in its post-apartheid era.
Written with meticulous care and absorbing detail, Telita Snyckers’ devastatingly blunt chronicle deserves to be read alongside Johann van Loggerenberg’s Rogue and Tobacco Wars, and Jacques Pauw’s The President’s Keepers.
Telita points out that the strategy of tobacco multinationals to neuter South Africa’s tax authority, the SA Revenue Service (SARS), is nothing especially novel. Almost from the 15th century, when tobacco was first discovered by European explorers in North America, merchants have been doing their damnedest to find loopholes in the rules: be it through rampant smuggling, dodging taxes or bribing politicians. Governments fought back in, at times, pretty draconian ways (in 1692 five Spanish friars were found smoking during a church service and put to death).
The reality is, almost since the day Buck Duke began mass-producing cigarettes in 1887, authorities have been a step behind. As this book meticulously chronicles, the large tobacco companies have often been actively involved in smuggling to boost their margins for decades, not to mention more ingenious methods of nimble side-stepping of tax services.
Along the way, as Telita deftly sketches it here, tobacco barons became virtuosos in propaganda. Bending the facts to support their narrative has become such an ingrained tactic, it’s now part of their DNA. Don’t tell Donald Trump, but tobacco merchants were the original fake news.
Take the example of a Lucky Strike advert from 1929, featuring the original poster girl, Rosalie Adele Nelson. Staring out seductively at the reader, above a tagline that reads ‘I’m a Lucky girl’, Nelson says: ‘I’ve found a new way to keep my figure trim – whenever the desire for a sweet tempts me, I light up a Lucky Strike.’
Another advert, from 1960, is of a successful businessman, staring meaningfully at the audience as he lights a cigarette, under a banner which read: ‘More scientists and educators smoke Kent with the micronite filter.’ What Kent hadn’t told anyone is that for years, those micronite filters were made with asbestos.
With such an effortlessly Machiavellian pursuit of profit, and blinding ethical agnosticism, is it any wonder that South Africa, already untethering from its moral centre under the Jacob Zuma presidency, was so comprehensively manipulated by tobacco interests?
It’s been a bracing reality-check for South Africa. Still basking in the glow of being an exciting and favoured emerging market, we were, after all, a more naive, trusting country at the turn of the last decade.
Just like the rest of the world, we had no idea how British American Tobacco (BAT), alongside a bubbling cauldron of illicit tobacco dealers, and an unofficial army of former mercenaries operating in the shadows, were playing journalists, regulators and the public like marionettes on a string.
Many of us were duped. I, for one, vastly underestimated how skilful and coordinated this really was.
Back in 2014 when I was working at Business Times, Van Loggerenberg put me in touch with a lawyer, Belinda Walter, whom he said had a wild, scarcely-believable tale of how BAT was not only spying on rivals, it was also operating a secret network of spies it was paying illegally. Of course, the tobacco giant had a lot to lose at the time: it was facing a wide-ranging probe into its tax practices that ultimately led to a R2 billion assessment against it. Walter, and others on BAT’s payroll, soon turned on Van Loggerenberg, dramatically weakening SARS in the process.
There are many who have fought for BAT to account for its role in this saga, none more so than Van Loggerenberg. But they’ve been resoundingly ignored. And instead, big tobacco has used its time-tested wiles to shift the focus to how it was ‘illicit tobacco’ that has destroyed the country.
Telita’s gripping narrative deftly slices through the spin, connecting the dots in a devastating critique of the industry – both legal and illicit. And she runs a red pen over the glaring contradictions, all over the place.
How, for example, do you reconcile the fact that the Tobacco Institute of South Africa claims its members – BAT, Japan Tobacco International and Philip Morris – manufactured 19 billion cigarette sticks in 2017/2018, yet tax was only paid on 15,3 billion cigarettes that year?
How do you reconcile the fact that big tobacco claims 72 000 people stand to lose their jobs in South Africa due to illicit tobacco, when BAT (which controls 72% of the market) only employs a grand total of 2 187 people?
The bottom line, as she points out, is that when tobacco companies pay less than their fair share of tax, thanks to some ham-fisted smuggling effort or a sophisticated profit-shifting scheme, ‘the result is the same: you and I pay more tax than we should’.
If there’s one person who can tell the story from an insider’s vantage point, it is Telita Snyckers. Between 1999 and 2010, she worked in several critical roles at SARS, including being part of the creation of its special compliance unit, later heading up its criminal investigations across the country, and working as a policy advisor in the Commissioner’s office.
You may not have seen her name much before, but it was because of Telita, and people like Telita, that SARS hit its high watermark. Before, obviously, the rapacious grip of rent-seekers in 2014 led to its unravelling under Commissioner Tom Moyane.
Since leaving SARS, she has worked in 25 countries across the world, including such far-flung places as Serbia, Ethiopia, Jordan and Kosovo, as an expert on tax and customs reform for clients that include the International Monetary Fund (IMF).
Before joining SARS, Telita was a public prosecutor and commercial litigation lawyer. Those skills are on full display in these pages, as she methodically dismantles the façade that big tobacco has built around itself. I’d hate to have come up against her in court.
Which makes this an indispensable, and global, view of how the bending of South Africa’s national interest to suit the tobacco companies, with such devastating precision, wasn’t some aberration: it was just part of a playbook stretching back centuries.
‘They control what we read; they control what our politicians do; they control where our law enforcement agencies look; and they’ll do anything to ensure that their supply chains remain opaque,’ she writes.
You’ve been warned.
‘One comes to the conclusion that you are either crooks
or you are stupid, and you do not look very stupid.’
– George Osborne, a member of the UK Parliament’s Public Accounts Committee, during questioning of the CEO of Imperial Tobacco.1
Acronyms
BAT – British American Tobacco
DNP – Duty not paid; also referred to as ‘GT – general trade’; ‘free markets’ or ‘border trade’ (short-hand for contraband or black-market cigarettes)
FCTC – Framework Convention on Tobacco Control, the World Health Organization’s instrument which seeks to curb the illicit trade in tobacco
FSS – Forensic Security Services, contracted by BAT
FITA – Fair Trade Independent Tobacco Association, whose members include the smaller independent tobacco manufacturers in South Africa
Imperial – Imperial Tobacco
JTI – Japan Tobacco International
OLAF – European Anti-Fraud Office
PMI – Philip Morris International
SARS – South African Revenue Service