Cigarette Ban A Major Impact On The Logistic Industry

It is unfair for legal entities such as ours. We pay tax and contribute to the country, while illegal entities evade tax, and their business continues to flourish.

Cigarette Ban A Major Impact On The Logistic Industry

Cigarette and tobacco products ban will result in severe long-term losses for businesses operating within the tobacco industry, from manufacturers to suppliers, wholesalers to distributors.

A major logistic operator in Malaysia that involves in the supply chain of tobacco products, expresses its concern about the Government’s proposed policy to ban the sale of cigarettes to anyone born after 2007.

According to the spokesperson of the logistic operator, it is remiss to believe that there will only be a minimal economic cost from implementing a ban.

“Beyond impacting the bottom-line of our business, it will also jeopardise our business as those born after 2007 are not allowed to work in companies that are involved in the tobacco supply chain. Young talents are key assets of logistic companies, without them, the business will not be able to sustain,” the spokesperson added.

“We are caught by surprised by the Bill as has a direct impact on our business and the Ministry of Health did not engage us prior to the tabling of the Bill. They should have sought our views and feedback beforehand.” The proposed ban will only further magnify Malaysia's illegal tobacco trade. The spokesperson said that the scale of the illegal tobacco trade in Malaysia could not be underestimated, as it currently stands at over 60%.

Surat terbuka kepada PM Dari Gabungan Pengilang Tembakau Malaysia
Rang Undang-Undang itu mempengaruhi kesaksamaan di kalangan rakyatnya. Berdasarkan dasar tersebut, individu yang lahir pada Disember 2006 dan individu yang lahir pada Januari 2007 akan menerima undang-undang yang berbeza secara sah.

“These criminal syndicates are large in number, extremely sophisticated, and quick to adapt.” With the traansshipment restrictions imposed for cigarettes last year, the syndicates were quick to change their modus operandi from docking at big ports to unloading onto small speed boats or fishing vessels before dropping off at private jetties and landing spots across the coastal area. It is extremely concerning that the ban will spur the growth of black market logistic supply chain in Malaysia that impacts the legitimate logistic operators like us” said the spokesperson.

“It is unfair for legal entities such as ours. We pay tax and contribute to the country, while illegal entities evade tax, and their business continues to flourish. Is this how the Government help enterprises recover from the onslaught of Covid-19?

While the Government has committed to increasing enforcement, we remain doubtful that any enforcement efforts will be effective. With the ban, the illegal market will explode uncontrollably,” he concluded.