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Tag: Malaysia

  • Malaysian Tobacco Control Groups Pushing for 5% Tax Increases

    Malaysian Tobacco Control Groups Pushing for 5% Tax Increases

    Tobacco control organizations in Malaysia are calling for annual 5% increases in tobacco taxes following survey findings showing broad public support for higher excise rates. Research conducted by the Social and Economic Research Initiative (Seri) found that 80% of 3,200 respondents supported yearly tax hikes, while 72% believed higher tobacco taxes could help ease broader cost-of-living pressures.

    Groups backing the proposal include the Malaysian Anti-Drug Association, Malaysian Council for Tobacco Control, and the Muslim Youth Movement of Malaysia. Seri senior researcher Muhammad Daniel Kittu said tobacco excise duties have remained largely unchanged since 2015 despite rising prices for staple goods, arguing that higher cigarette prices could reduce smoking rates while redirecting household spending toward essentials such as food, healthcare, and education.

    Responding to concerns that higher taxes could fuel illegal sales, Kittu said weak enforcement — rather than pricing — remains the primary driver of illicit tobacco activity.

  • BAT Malaysia Reports First-Ever Loss

    BAT Malaysia Reports First-Ever Loss

    British American Tobacco Malaysia reported its first quarterly loss since the company’s formation through the 1999 merger of Rothmans of Pall Mall (Malaysia) and Malaysian Tobacco Company, citing rising regulatory costs and worsening illicit cigarette trade in Malaysia. The company posted a net loss of RM35.2 million ($8.8 million) for the first quarter ended March 31, compared with a net profit of RM23.3 million ($5.8 million) a year earlier, while revenue declined to RM160.3 million ($40 million) from RM322 million ($80.5 million).

    Operating expenses increased 74.7% year-over-year to RM64.68 million (16.2 million), driven largely by one-off costs tied to the implementation of Malaysia’s retail tobacco display ban and restructuring linked to a new route-to-market strategy. BAT Malaysia said legal combustible cigarette volumes fell 4.5% during the quarter, while illicit cigarette incidence rose to 56.7% of total industry volume from 54.4% in the prior quarter, marking the first increase since 2021.

    The company declared a first interim dividend of five sen ($0.0125) per share, down from 7.5 sen ($0.0188) a year earlier. Management said the first quarter represented a transition period as the company implemented operational changes intended to improve long-term competitiveness and efficiency.

  • JTI, Authorities Trying to Dent Malaysia’s Illicit Market

    JTI, Authorities Trying to Dent Malaysia’s Illicit Market

    Japan Tobacco International said the illicit cigarette trade remains a major challenge in Malaysia, with counterfeit tax stamps and increasingly sophisticated cross-border smuggling operations complicating enforcement efforts. According to JTI Malaysia, the share of illicit cigarettes carrying counterfeit Malaysian tax stamps rose from 8.7% in 2023 to 16% in January 2026, the highest level recorded. The company cited a recent enforcement operation in the Philippines that uncovered counterfeit Malaysian tax stamps allegedly intended for the Malaysian market.

    JTIM estimated the country’s illicit cigarette incidence rate at 56.7%, representing roughly RM4 billion ($1 billion) in lost government revenue. Company executives said affordability remains a key driver of illicit trade, warning that rising logistics costs, raw material inflation, and potential excise tax increases could widen the price gap between legal and illicit products. The company also pointed to growing consumer migration toward alternative nicotine products such as vapes, which currently face lower taxation levels than cigarettes.

    JTIM said policymakers are evaluating stronger deterrence measures, including digital tax stamps designed to improve supply-chain tracking and real-time product authentication. The company also called for a more balanced tax framework across nicotine categories, advocating for vape taxation to align more closely with heated tobacco products rather than combustible cigarettes.

  • Former Malaysian Minister Defends Nicotine Delisting After Court Rebuke

    Former Malaysian Minister Defends Nicotine Delisting After Court Rebuke

    Malaysia’s former health minister Zaliha Mustafa defended her 2023 move to delist liquid nicotine from the Poisons Act 1952, calling it a “critical step” to bring a fast-growing vape market out of the black economy and into a regulated, taxable framework. Her remarks follow a High Court ruling by Justice Aliza Sulaiman that described the exemption order as irrational after a judicial review brought by health NGOs.

    Zaliha argued that, at the time, enforcement under the Poisons Act had failed to curb widespread open sales of nicotine vapes, and that the exemption allowed authorities to track supply chains while paving the way for the Control of Smoking Products for Public Health Act 2024 (Act 852), which now regulates vape devices and nicotine liquids and bans sales to minors. She said the legal challenge reflects healthy checks and balances, but confirmed the Health Ministry will appeal, maintaining that the 2023 decision enabled Malaysia to transition from outdated poison controls to a comprehensive tobacco and vape regulatory system.

  • MALAYSIA VAPE INDUSTRY WARNS OF $150 MILLION ANNUAL TAX REVENUE LOSS IF 15ML PRODUCTS ARE HASTILY BANNED

    MALAYSIA VAPE INDUSTRY WARNS OF $150 MILLION ANNUAL TAX REVENUE LOSS IF 15ML PRODUCTS ARE HASTILY BANNED

    Malaysia’s local vape industry has warned that any abrupt move to ban 15ml vape products under the Control of Smoking Products for Public Health Act 2024 (Act 852) could cost the country more than RM600 million ($150 million) in annual tax revenue, while putting thousands of Malaysian jobs at risk.

    Local vape companies have collectively invested tens of millions of ringgit since Act 852 was introduced, including product registration with the Ministry of Health Malaysia (MOH), SIRIM certification, excise duty payments, establishment of local manufacturing facilities, laboratory testing, and compliance with safety and labelling standards.

    Mohamad Nizam Talib, President of the Malaysian E-Vaporizers and Tobacco Alternatives Association (MEVTA), stressed that the industry had taken significant steps to comply with every regulatory requirement since Act 852 came into force.

    “We have followed the law and made substantial investments to ensure our products meet government standards. Now, out of nowhere, there are proposals to eliminate the 15ml product category, without any reasonable transition period. This does not just affect the industry. It affects national revenue and the livelihoods of Malaysians,” he said.

    Based on current estimates, there are approximately 1.5 million vape users in Malaysia, with around 70% using liquid-based vape systems. Average consumption is estimated at roughly eight bottles per month.

    At a tax rate of RM6 per 15ml bottle, the government is estimated to collect approximately RM50 million ($12.5 million) in tax revenue each month or more than RM600 million annually from this product category alone.

    A hasty ban on 15ml products would not only risk crippling the legitimate local industry, but could also fuel a surge in smuggling, accelerate black market growth, undermine regulatory control, and open the door to untaxed and unregulated products flooding the market.

    “Consumer demand does not simply disappear when legal products are taken off the shelf. Users will turn to the black market for unregulated and untaxed alternatives that fall entirely outside the government’s oversight,” Nizam added.

    The industry also raised concerns about the patchy enforcement of Act 852, noting that online sales remain rampant, unregistered products are still readily available, and the misuse of vape products containing prohibited substances, including synthetic drugs, is on the rise.

    The real driver of vape misuse, the industry argued, is the illegal market and underground products that sit completely outside any regulatory framework, not the legitimate, registered products currently being targeted.

    At the same time, the industry highlighted what it described as a glaring policy inconsistency: open system devices remain permitted, taxes continue to be collected, and SIRIM certifications are still being approved, yet the legally manufactured vape liquids designed for use with these very devices are now being proposed for elimination.

    “If the devices are still legal, why are legitimate vape liquids being singled out for a ban? This sends deeply mixed signals to investors and the industry,particularly given the significant investments that have been made to meet all government requirements,” Nizam said.

    Malaysia’s local vape industry is estimated to employ more than 8,000 workers in manufacturing and over 15,000 in retail, with thousands more supporting jobs throughout the broader supply chain.

    A significant portion of industry players are young entrepreneurs and Bumiputera business owners who have built their businesses through legal channels over the past few years.

    Against a backdrop of economic uncertainty and rising retrenchment cases across multiple sectors, any drastic action against the vape industry would further strain employment opportunities for Malaysians.

    The industry also claimed that no meaningful consultation had been conducted with the relevant economic ministries and agencies, including the Ministry of Finance, the Royal Malaysian Customs Department, the Ministry of Domestic Trade and Cost of Living (KPDN), and the Ministry of Investment, Trade and Industry (MITI), before the proposal to eliminate 15ml products was tabled.

    In light of this, the industry is calling on the Prime Minister to intervene directly to ensure that any policy changes properly account for the economic implications, national revenue, investment stability, and the risk of a growing black market that will become increasingly difficult to rein in.

  • Malaysia’s Illicit Cigarette Market at ‘Critical Stage’

    Malaysia’s Illicit Cigarette Market at ‘Critical Stage’

    Malaysia’s illicit cigarette market is approaching a “critical stage,” with illegal products now accounting for roughly 50% of total consumption, according to industry representatives. Philip Morris International and Japan Tobacco International executives said the country’s illicit rate is among the highest in the region, far exceeding levels in markets such as Singapore and Thailand, and warned that widespread availability has normalized illegal purchasing among consumers.

    Industry speakers linked the surge to a sharp excise tax increase in 2015, which widened the price gap between legal and illicit products and drove illegal market share to as high as 63% at its peak. Officials and stakeholders emphasized that addressing the issue will require a coordinated approach combining stronger enforcement, policy adjustments and greater public cooperation, as smuggling networks continue to adapt and exploit regulatory gaps.

  • JTI Malaysia: Illicit Cigarettes Dominate as Price Gap Widens

    JTI Malaysia: Illicit Cigarettes Dominate as Price Gap Widens

    “Cost pressure means consumers often cannot afford to think about safety,” was the message from Joseph Anak Janting, president of Malaysia’s Dayak Transformation Association (TRADA). The comment came as officials examined the nation’s thriving illicit tobacco market, not just its financial impact, but also the unknown ingredients being ingested from unregulated products.

    Japan Tobacco International (JTI) Malaysia released data today (April 30) that shows 57% of the Malaysian tobacco market is illicit, a number that climbs near 80% in regions such as Sabah and Sarawak, where the market is driven by a significant price gap. Legal cigarettes cost over RM20 ($5) per pack compared to illicit products that sell for as little as RM4 to RM8 ($1 to $2), following recent excise tax increases and retail restrictions. In Sarawak, where the average monthly household income is RM5,504 ($1,376) and rural incomes are significantly lower, Janting said the price gap is not a minor consideration; it is the difference between affording cigarettes and not affording them.

    JTI identified three primary categories of illicit products: counterfeit tax-stamp cigarettes, which have doubled to 16% market share since 2023; smuggled “whites” lacking tax stamps; and illegally imported kretek cigarettes. Officials said expansion of the illicit trade is contributing to an estimated RM4 billion in annual lost tax revenue, with enforcement challenges compounded by cross-border smuggling and counterfeit production networks.

  • Malaysian Vape Industry Group Pushes Back on Drug Contamination Claims

    The Malaysian Retail Electronic Cigarette Association (MRECA) raised concerns over reports of vape products containing prohibited substances, while emphasizing that such cases are linked to illicit trade rather than the regulated industry. The group said products approved by the Ministry of Health must meet strict testing and compliance requirements and are distributed through licensed retail channels.

    MRECA said illegal or contaminated products are typically sold through unregulated markets, including unauthorized online platforms, and should not be conflated with compliant offerings. The association also warned about the spread of misleading content on social media, which it said has unfairly implicated legitimate retailers and created confusion about enforcement efforts.

    The group has filed complaints with authorities to address false claims and called for clearer distinctions between regulated products and illicit goods. MRECA said it will continue working with regulators to support enforcement and maintain industry standards.

  • Illicits Cutting into Malaysian Sundry Shop Sales Beyond Cigarettes

    Illicits Cutting into Malaysian Sundry Shop Sales Beyond Cigarettes

    Sundry shops across Malaysia are losing customers to widespread illegal cigarette sellers, according to the Federation of Sundry Goods Merchants Associations of Malaysia. Its president, Hong Chee Meng, said illicit sales by unlicensed retailers, including outlets run by migrant workers outside the association, are undercutting legitimate family-run businesses that comply with regulations and contribute to government revenue.

    With legal cigarette prices ranging from RM12.40 to RM18.40 ($3.10 to $4.60) per pack versus RM3 to RM8 ($0.75 to $2) for illicit products, the price gap is drawing smokers away from compliant retailers. Hong said cigarettes are a key traffic driver for sundry shops, and when customers buy from illegal sellers, shops also lose add-on purchases such as drinks, snacks, and household goods, compounding the impact on small businesses.

  • BAT Malaysia to Trim Workforce

    BAT Malaysia to Trim Workforce

    British American Tobacco Malaysia Bhd said it may reduce its workforce as part of an operational “optimization” linked to the rollout of a new route-to-market distribution model from July 1. In a filing today (March 31), the company said affected employees would receive statutory and contractual entitlements, including retrenchment benefits where applicable. BAT Malaysia reported 283 employees in its 2024 annual report, but the filing did not specify how many roles could be impacted. The company said the move is intended to align staffing with future operating requirements and follows a shift begun in 2022 toward allowing retailers to place orders through online channels, sales representatives, or call centers, a model it previously said could reduce costs by 20% to 25%.

    The announcement comes amid tighter regulation of tobacco products in Malaysia, including a reported plan for a nationwide vape ban starting with disposable products, a 42.8% excise duty increase on tobacco and heated tobacco products under Budget 2026, new pictorial health warnings, and a ban on retail cigarette displays. The Control of Smoking Products for Public Health Act, which took effect in 2024, prohibits the sale of tobacco and vape products to individuals under 18. Shares of BAT Malaysia last traded at RM5.65 ($1.41) at today’s noon break, valuing the company at RM1.61 billion ($403 million).