A recent report by Oxford Economics found that an alarming 59% of the cigarettes sold in Malaysia are from the illicit cigarette trade. This means that around 6 out of 10 cigarettes sold in Malaysia are from the black market. And British American Tobacco Bhd of Malaysia has. Had enough of it.
With its performance under pressure from cheaper illicit cigarettes, the publicly listed BAT Malaysia launched a nationwide campaign on July 1 to intensify its fight against contraband tobacco in Malaysia. The campaign, called “Stop the Black Market”, seeks to draw attention to the seriousness of the tobacco black market, and invite Malaysians to share their thoughts on how to curtail this problem.
“Enforcement alone is not enough to address this issue,” said Jonathan Reed, managing director of BAT Malaysia. “More attention needs to be drawn to the severity of the issue and Malaysians should have an avenue to voice their concerns, hence why BAT Malaysia is coming to the forefront with this campaign.
Reed said the negative impact of the tobacco black market is far-reaching as it affects legal businesses and the lives of all Malaysians, not just smokers.
“We applaud the hard work done by law enforcement agencies recently and we hope that these efforts continue to pressure the syndicates operating in this black market.
According to the report, “illegal cigarettes” refer to cigarette and tobacco products that are smuggled into Malaysia. Both “white” cigarettes and kretek are smuggled and as of 2018, about 75% of the illegal cigarettes sold in Malaysia are smuggled whites.
The report said that illegal cigarettes cost Malaysia around RM5.1 billion (US$1.2 billion) in taxes in 2018 going to a loss of RM5.3 billion in 2019.
The black market contributes to lawlessness as the report found that 62% of the total tobacco market in Malaysia is owned by criminal gangs, which could affect the safety of all Malaysians.
In addition, the report indicates that the low pricing of illegal cigarettes also contributes to the rise of underage smoking reported in Malaysia.