Retail Display Ban Cause Complexity To Retail Business

The ban will certainly have a negative impact on the businesses and governments need to look at the impact more broadly, says Hong Chee Meng, President of FSGMAM

Retail Display Ban Cause Complexity To Retail Business

KUALA LUMPUR, 29 June 2022 – The Federation of Sundry Goods Merchants Associations of Malaysia (FSGMAM) is deeply concerned with the recent announcement by the Health Minister, YB Khairy Jamaluddin, that the Ministry of Health is planning to introduce a tobacco product display ban, plain packaging and banning the sale of cigarettes and vaping products to those born after 2005.

Hong Chee Meng, President of FSGMAM, said, “These acts will certainly have a negative impact on the businesses and governments need to look at the impact more broadly.”

“We have not had any engagement with the Health Ministry on these proposals. The proposed tobacco products display ban will add complexity to a currently straightforward business process.”

“We will need to make changes to the current display cabinets – which is a cost we must consider, particularly when the economy is sluggish, and the inflation is on the rise. It is not an ideal situation for businesses,” said Hong.

According to Hong, banning the sale of cigarettes and vaping products to adults born after 2005, plain packaging, and product display ban will impact the industry and it could lead to severe illicit cigarettes trade, which is now dominating more than half of the overall market.

“With Malaysia remaining as the number one country for illegal cigarettes in the world, the Government should focus on addressing this problem first before implementing any new action,”

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“The illicit cigarettes situation is already severe with 6 out 10 sticks in the market being smuggled cigarettes. Introducing plain packaging for tobacco products will lead to an additional form of illicit cigarettes i.e. counterfeits.

“At the same time, smuggled cigarettes will not comply with the requirements, leading consumers further away from legal products. Therefore, only the illicit cigarettes trade will benefit from this action and consumers will continue to use illegal products,” he said.

Implementing bans

Retailers are fully implementing the ban against sales to under 18s. “This is simple as it is usually obvious whether a purchaser is underaged.”

“However, with the ban on the sale of cigarettes and vaping products to adults born after 2005, retailers will have to check the birthdates of even adults,” Hong explained.

“We are concerned about the potential burden and liability of our members. The duty to implement the bank will fall on retailers. They will need to check the birthdates of every adult purchaser to determine whether they were born before or after 2005. In addition, this will make transactions longer and potentially lead to arguments with purchasers.” Hong added.

“If the Ministry of Health intends to stop people smoking, the first action should be to stop illegal cigarettes. Ministry of Health should ramp up the enforcement with the specific power under their own Control of Tobacco Product Regulations 2004 before introducing new policies that will only cause more burden to legitimate businesses and further fuel the illicit cigarette trade in Malaysia,” concluded Hong.