Illicit Tobacco Trade To Rise To 61.7% If Smoking And Vape Ban Imposed

In the same market survey, two-thirds of the respondents acknowledged that vaping has helped them either quit smoking entirely or reduce their consumption of smoking cigarettes.

Illicit Tobacco Trade To Rise To 61.7% If Smoking And Vape Ban Imposed

Size of illicit market to grow to RM8.7 billion


KUALA LUMPUR, 19 July 2022 – As the 15-19 age group cohort accounts for 7.7% of the tobacco use population, a generation endgame (GEG) will see illicit trade increase from 58.4% as of March 2022 to 61.7%, resulting in the size of the illicit market rising to RM8.7 billion.

These findings were shared by a non-governmental think-tank today.

In a study carried out by its market research partner, The Green Zebra, The Datametrics Research and Information Sdn Bhd (DARE) in its A Smoke-Free Malaysia report also revealed that 83% of Malaysians think the illegal cigarette trade will increase exponentially with the ban on the sale of cigarettes to those born after 2005.

Pankaj Kumar, Managing Director of DARE, said, "Banning cigarette sales will not work in reducing smoking prevalence. This move will not only lead to a rise in the illegal cigarette market to RM8.7 billion, thus benefiting criminal syndicates.”

“Malaysia simply does not have the same market dynamics as countries like New Zealand or Singapore, which has a lower smoking prevalence and incidence of illicit trade of less than 11% and 14%, respectively. However, in a country like Malaysia where our smoking prevalence is more than 20%, and our tobacco black market stands close to 60%, GEG is not a viable option.”

Pankaj added that even in countries like New Zealand, before the introduction of GEG policy, the country undertook a massive exercise in reducing the prevalence of smoking by helping smokers quit the habit via a Tobacco Harm Reduction (THR) strategy, which has been well documented. As a result, the country experienced its largest-ever decline in smoking incidences, from 11.9% in 2020 to 9.4% in 2021.

In the same market survey, two-thirds of the respondents acknowledged that vaping has helped them either quit smoking entirely or reduce their consumption of smoking cigarettes.

Regulation and Enforcement are Key in Tackling Smoking Prevalence

According to Pankaj, Malaysia must deploy the right strategies, including regulation, to achieve the standards set by countries like New Zealand or Singapore in reducing smoking prevalence and incidence of illicit trade. “Products must be regulated to ensure that they are safe and secure, to ensure consumers are protected and are fully aware of the risk factors”.

Pankaj explained. “Reducing cigarette consumption with an effective THR public policy allows the government to reduce the cost of treating illnesses and diseases caused by cigarettes. Malaysia has so much to gain by regulating vape in this country”, Pankaj reiterated.

On enforcement, according to Pankaj, “While in Budget 2021, the government has designated five key ports as transhipment points for the trading of tobacco products, it has not stopped smuggling activities. The government needs to step up enforcement at these ports to ensure they act as pure transhipment hubs and not the point of entry for illicit trade”.

The government also needs to step-up controls and enforcement of contrabands at various landing points on the coastal lines of the nation. There need to be concerted efforts, not only from the customs but also the navy, by deploying our vast seagoing vessels to tackle illicit trade.”

Not The Time For GEG

Based on DARE’s findings, it is not an appropriate time to introduce GEG just yet. The government should tackle other fundamental headwinds faced by the tobacco industry.

This includes not only enforcement and regulation for THR products but also a moratorium on excise duties for tobacco products to ensure the price disparity between legal cigarettes and illicit trades can be narrowed.

A Smoke-Free Malaysia report is available on daresearch.com.my