Understanding the market principle of supply and demand is crucial in addressing the illegal cigarette trade.
In a recent discussion on Malaysia’s ongoing struggle with illegal cigarette prevalence, experts shed light on the key factors contributing to the country’s high rate of over 55 per cent.
Hazem Ibrahim, founder and CEO of Asias Security Group, emphasized that while supply-side government policies play a role, understanding the market principle of supply and demand is crucial.
Consumers, particularly those in the B40 category with limited financial resources, are drawn to cheaper and widely available illegal tobacco products.
Hazem also addressed the potential impact of the ‘Control of Smoking Products for Public Health Bill 2023’ and the Generational End Game (GEG) on the prevalence of illegal cigarettes.
Despite some progress made in 2022 and 2023 through tighter policies and enforcement actions against transshipments, the illegal cigarette trade has remained a significant concern, hovering above the 55 per cent mark.Asias Security Group Hazem Ibrahim on illegal cigarette trade remaining a significant concern.
Until now, illegal cigarettes in Malaysia remained high at 55.3 percent in May this year, with only a slight decrease from 56.6 percent in 2022. Although it has been many years, there is still no serious and effective strategy to combat contraband cigarettes in the country. #GEG pic.twitter.com/snTqWRJY36— tba (@tarmizianuwar) October 11, 2023
Protecting Public Health and Preventing Revenue Losses
If not revised accordingly, the current Bill and GEG may fail to address the high demand for illegal cigarettes, posing risks to public health and substantial revenue losses for the government.
To combat the rampant illegal cigarette trade, Ibrahim stressed the importance of effectively regulating border customs and eliminating corruption.
The majority of illicit cigarettes enter Malaysia through neighbouring borders such as Thailand and Indonesia.
Strengthening customs enforcement and adopting new technologies to tackle smuggling are essential steps in curbing this issue.
Besides enforcement efforts, harm reduction strategies were highlighted as a potential approach to combating the illicit tobacco trade.
" … doctors call for policymakers to accept the science and look into how harm-reduction strategies could benefit Malaysia in its fight against the epidemic of smoking."— voices4vape (@voices4vape) May 26, 2023
#vaping #ecigarettes #tobaccoharmreduction https://t.co/Ql5QfhroIh
Advocating for a Comprehensive Approach
Ibrahim emphasized the need for less stringent regulations on smoke-free products (SFPs) and other less harmful alternatives.
Recognizing the need for a comprehensive tobacco harm reduction program, he suggested legalizing vaping as a Nicotine Replacement Therapy (NRT) tool to provide smokers with safer alternatives.
Risk-proportionate taxation based on relative risk assessment and regulating the availability of flavours in smoke-free products were also proposed.
Experts agree that promoting an innovation-driven ecosystem is crucial in developing healthier alternatives to conventional tobacco products.
By investing in research and development, Malaysia can foster innovation and encourage scientists and entrepreneurs to explore novel solutions that mitigate risks associated with certain products.
As Malaysia continues its battle against the illegal cigarette trade, addressing these key factors and implementing necessary measures will be vital in protecting public health, reducing revenue losses, and creating a safer environment for all citizens.
READ MORE: The GEG Dilemma: Is It Fair Or Ineffective?