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Singapore Investment


Cigarette firms urge review of 'unproductive' tobacco ban, warns govt could lose more than RM5 bil in revenue

KUALA LUMPUR (July 31): The Confederation of Malaysian Tobacco Manufacturers (CMTM) has urged Putrajaya to review the Bill prohibiting tobacco products from those born in 2007 onwards, saying it could push illicit trade up and cause the government to lose more than RM5 billion in revenue from the industry.

In an open letter to Prime Minister Datuk Seri Ismail Sabri Yaakob, the group — comprising British American Tobacco (Malaysia) Bhd, JT International Bhd, and Philip Morris (Malaysia) Bhd — said the illegal tobacco and vape market could "explode" if the proposed act comes into force.

"In Malaysia, the illegal market for tobacco products is huge, with estimates that almost 60% of cigarettes are sold illegally. The scale of the illegal tobacco trade in Malaysia should not be underestimated. There are many criminal syndicates that are sophisticated and can quickly adapt to any changes.

"Industry figures show that an outright ban would cause illicit trade to rise from 57.7% in May 2022, to as high as or more than 63.8% in 2020. This will lead to the government losing over RM5 billion in revenue from the tobacco industry," it said.

The CMTM also cautioned that the impact of the proposed Control of Tobacco Product and Smoking Act 2022 extends beyond those born in 2007 onwards, towards the economy as a whole.

"The proposed generational endgame is punitive and punishes all. Businesses will experience difficulty in enforcing some of the provisions of the Act and in some cases, compliance costs will also rise."

As a result of these higher costs, businesses will find it difficult to maintain their competitiveness in this challenging economy, said the group.

"Some may be forced to close their businesses, causing thousands to be retrenched. Meanwhile, businesses may also have to cut costs to ensure over costs are under control," it said, adding that Malaysia's lustre among investors may be dimmed because of the Act.

"Tourists will also be affected because the enforcement powers under the Act are wide, criminalising individuals, including tourists and business owners.

The confederation also called the Bill an attack on personal freedoms.

"Adults are deemed to have the right to control themselves and no authority can revoke this right. The Consumer Protection Act 1999 was promulgated to give greater protection to consumers, and the rights given by this Act cannot be terminated," it said, adding that Section 6 of the Act stipulated that its provisions will be in force, despite attempts to limit them through contracts.

The CMTM also called the penalties for failing to comply with the proposed Act as "cruel".

"Our future generations will be subject to harsh enforcement and face the possibility of their vehicles and homes being searched, their phones being checked and forced access to their personal data.

"More worrying is that the Act will provide wide-ranging enforcement powers, such as to access personal data that requires users [to] give up their passwords; to open up bags; detaining and searching of vehicles; and forcibly entering homes to search and seize, without warrants, including body searches.

"Instead of creating a smoke-free generation, Malaysia could instead create a new generation filled with criminals who are punished for buying or using a product that is legally allowed to others," it said.

Finally, the CMTM said the Bill would cause individuals born in 2007 onwards to be treated differently from those born before that.

"The future generation will not have a choice but to consent to identification card checks, which contradicts the Personal Data Protection Act 2010.

"Working adults will have to hide their habit and use tobacco products, heated tobacco products or vapes in dark corners, in fear of being caught for using illegal substances. They will be discriminated against and may feel that they are being treated unfairly.

"Smoke-free products are available on the market because of global scientific innovations, [as well as] success and progress in research within this field. It is vital that Malaysia strikes a balance between public health and market innovation that has created alternatives for adult smokers with the proposed Act," said the confederation.

Under the proposed Act, no person born on Jan 1, 2007 and afterwards shall smoke any tobacco product or substitute tobacco product, use any smoking device, or possess any tobacco products, smoking substances, substitute tobacco products or smoking devices.

Any person found in breach commits an offence and shall, on conviction, be liable to a fine not exceeding RM5,000, it reads.

Apart from that, individuals born on Jan 1, 2007 and afterwards, who purchase tobacco products, smoking substances and substitute tobacco products or smoking devices, may face a fine not exceeding RM5,000 upon conviction.


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