Cig­a­rette black mar­ket stands at record 57.1 per cent

New Straits Times - - News - AINA NASA KUALA LUMPUR news@nst.com.my

FUR­THER in­creases in cig­a­rette prices will have no ef­fect on smok­ers as they will turn to cheap and read­ily avail­able il­le­gal cig­a­rettes which are abun­dant in the black mar­ket.

The Con­fed­er­a­tion of Malaysian To­bacco Man­u­fac­tur­ers (CMTM) warned that the im­pres­sion that smok­ers would quit if cig­a­rettes were too ex­pen­sive ig­nored the fact that there were cheaper al­ter­na­tives avail­able.

“The cig­a­rette black mar­ket stands at new record high of 57.1 per cent, based on the lat­est Il­licit Cig­a­rette Study con­ducted by Nielsen Malaysia in De­cem­ber last year.

“This is one of the high­est rates in the world, demon­strat­ing that the il­le­gal mar­ket is some­thing that can­not be ig­nored,” it said yes­ter­day.

This came as a re­sponse to gov­ern­ment an­nounce­ments this week that cig­a­rette prices would be in­creased to de­ter the unhealthy habit among Malaysians.

CMTM ques­tioned the ra­tio­nale be­hind in­creas­ing the price of cig­a­rettes to RM21.50 a pack, when there were hun­dreds of un­reg­u­lated il­le­gal cig­a­rette brands cost­ing be­tween RM3 and RM5 a pack.

Re­ports by the Health Min­istry, it said, in­di­cated that be­tween 2011 and 2015, the num­ber of smok­ers had in­creased.

Ac­cord­ing to the min­istry’s Global Adult To­bacco Sur­vey (GATS) 2011, the num­ber of smok­ers in the coun­try stood at 4.75 mil­lion.

“Sub­se­quently, the min­istry’s “Na­tional Health and Mor­bid­ity Sur­vey (NHMS) 2015 — Re­ports on Smok­ing Sta­tus among Malaysian Adults” re­ported that the num­ber of smok­ers had in­creased to five mil­lion while cig­a­rette prices dur­ing the same pe­riod of time in­creased by more than 30 per cent.

“If cig­a­rette price in­creases did have a cor­re­la­tion to smok­ing ces­sa­tion, the per­cent­age of smok­ers would have dropped.”

When more than one in two packs was il­le­gal and sold so cheaply, it said, in­creas­ing the prices of le­gal cig­a­rettes would only re­duce gov­ern­ment rev­enue col­lec­tion.

The ones prof­it­ing from an­other round of price in­creases would be traders reap­ing huge prof­its from the il­le­gal ac­tiv­ity.

This re­sulted in losses of ap­prox­i­mately RM4 bil­lion in gov­ern­ment rev­enue col­lec­tion, as re­ported by the Cus­toms De­part­ment last year.

“Sta­tis­tics from the To­bacco and E-Cig­a­rette Sur­vey re­leased by the min­istry re­cently re­ported that about 71.6 per cent of ado­les­cents who smoked in Malaysia spent less than RM9 for a pack of cig­a­rettes, which is be­low the min­i­mum cig­a­rette price thresh­old of RM10.

“This makes il­le­gal cig­a­rettes the key con­trib­u­tor for ado­les­cents to start smok­ing, given the easy ac­ces­si­bil­ity and cheap price fac­tor.”

CMTM said if the min­istry was se­ri­ous about re­duc­ing smok­ing in Malaysia, com­bat­ing cheap il­le­gal cig­a­rettes should be their num­ber one pri­or­ity.

“CMTM be­lieves this is­sue needs to be made a na­tional pri­or­ity re­quir­ing con­certed ef­forts from all en­force­ment agen­cies in a holis­tic ap­proach in tax pol­icy.

“All en­force­ment agen­cies, in­clud­ing the Health Min­istry, should work to­gether with the Cus­toms De­part­ment to fight the trade in il­le­gal cig­a­rettes,” it said, adding that a mora­to­rium on cig­a­rette ex­cise was nec­es­sary.

To re­duce smok­ing in Malaysia, com­bat­ing cheap il­le­gal cig­a­rettes should be the num­ber one pri­or­ity.

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