KUALA LUMPUR: Tobacco giant Japanese Tobacco International (JTI Malaysia) Berhad has come out in support of a finance ministry multi-agency task force set up to curb the illegal trading of cigarettes and alcohol, but urged high targets to be set for enforcement agencies.
JTI managing director Cormac O’Rourke said the task force would be more effective if the agencies were committed to high key performance indicators (KPI) to make them more accountable.
This way, their progress could also be measured, he told a press conference at the JTI Malaysia headquarters today.
O’Rourke noted that RM5 billion in revenue is lost annually from illegal cigarette trading alone.
He recommended that one KPI for the task force should be halving the illegal trade of cigarettes by the end of the year.
Recently, the finance ministry set up the task force, including the domestic trade and consumer affairs ministry, the health ministry and the police to combat illegal trading.
O’Rourke said consistent policies to curb the black economy — estimated at RM300 billion per year — must be made at the Cabinet level.
Elaborating, he said the health ministry should not be drafting “counter-productive” policies that would place more restrictions on legitimate tobacco manufacturers.
“The ministry should not damage efforts of the task force,” he said.
For example, O’Rourke said the health ministry’s proposed amendments to the Control of Tobacco Products Regulations 2004 (CTPR) to raise the minimum cigarette price from RM10 to RM15 would further increase demand and drive the sale of contraband cigarettes.
He noted that the Illicit Cigarette Study, conducted by Nielsen, showed that local contraband cigarette sales are continuing to grow, with 12.2 billion sticks of contraband cigarettes sold and consumed in Malaysia in 2019.
This had made Malaysia the number one country in illegal cigarette trading in the world for the past two years, he added.
On a separate issue, JTI also raised alarm over the rise in illegal vaping in Malaysia, which now accounts for 10% of total consumption of nicotine products in the country.
O’Rourke said a recent consumption pattern study, conducted by Ipsos, a global market research and consulting firm, showed 30% of illegal vaping users, above the age of 18, are previous non-smokers.
“They are now consuming unregulated products, despite existing controls and restrictions over such products under the Poisons Act 1952,” he said, adding that no companies in the country had been issued licences to import and distribute nicotine-containing vapes.
O’Rourke said the government needed proper regulations for such products, as they presented alternatives for people who wished to smoke less.
He added that nicotine-containing vapes were currently both widely imported and produced locally.
He warned that in the absence of regulations, these products may contain traces of other substances such as THC.
O’Rourke added that despite the government promising draft regulations for vaping by March, there had been no consultations or latest news on the law so far.
“We again call on the health ministry to enforce existing laws, hold consultations with the legitimate industry players and not take any further regulatory measures against legitimate businesses until such a time that illegal trading is brought under control,” he said.