As much as some uninformed individuals would like to think that consuming contraband goods benefit the average man-on-the-street in the long run due to its cheaper retail price, looking at this issue from the surface rarely presents the full picture.
Take for instance the growing trend of illegal cigarettes. The cycle of production, distribution, sale and end-user of illegal cigarettes is a crime driven by greed and an opportunity for criminal enterprises to expand their reach. As such, criminals have become well networked and are involved in all aspects of the illegal cigarette cycle.
Contraband or counterfeit products in Malaysia have become an increasingly pressing issue plaguing online and offline businesses across various industries, most notably software, tobacco, and pharmaceuticals. In this country specifically, the sale of Illegal cigarettes, often also referred to as contraband tobacco, has become a dangerous trend. These are products that do not comply with Malaysia’s tobacco regulations – specifically those regarding graphic health warning, health information, and the name and address of manufacturer.
Illegal cigarettes also raise questions with regard to ingredient composition and harmful health effects. The cigarette packaging of contraband products also does not provide relevant information required by current regulations.
Illegal cigarettes are largely manufactured in illegal factories in Malaysia and across the Southeast Asia region. Available at very low prices compared to government regulated cigarettes, they flood the Malaysia market with untaxed and unregulated cigarettes.
A Great Risk to Young People
It’s been reported that a significant portion of young smokers regularly choose illegal cigarettes, a serious public health problem that undermines efforts to curb young smoking rates. Worse still, a huge proportion of youth these days are having direct access to illegal cigarettes, especially in big cities like Kuala Lumpur, Johor Bahru, and Penang.
Youth of 18 years and below are a critical focus for tobacco control policy. This is simply because most adult smokers report smoking onset before the age of 20-years-old, if one can reach adulthood without smoking, then the probability of smoking onset is greatly reduced.
The low price of illegal cigarettes means they become easily accessible even to kids who have very little pocket money! For decades, many parties in Malaysia have worked hard to keep cigarettes out of the hands of youth. For example, convenience store and other legitimate retailers view the prevention of the sale of cigarettes to minors as an important social responsibility.
But regardless of the many measures put in place to deter kids from smoking, the influx of massive amounts of inexpensive, easily accessible cigarettes has continued to derail those efforts. Illegal cigarettes can be purchased at the same cost as a packet of candy or a packet of soft drink, inevitably driving the increase in demand by youth for illegal cigarettes.
Illegal Cigarettes Harm a Nation’s Economy
It means annual tax revenue losses in the billions of ringgit – funds which are no longer available to help support health and education initiatives. And because of these illegal cigarettes low price appeal, it’s hardly surprising that studies show of the 23 billion sticks of cigarettes that Malaysians in 2012, about eight billion sticks are contraband.
The Asia-11 Illicit Tobacco Indicator 2012 report estimated that the annual tax loss for Malaysia from the illicit consumption cost more than RM1.9bil in 2012. Meanwhile, local news reports also quote tobacco industry professionals revealing that with the current prices of duty-paid cigarettes, those smoking illegal cigarettes now cut across all demographics and were not confined to the lower income groups or foreign workers.
Illegal cigarettes were sold openly on the streets, with many vendors and peddlers offering the items for a fraction of the price of the duty-paid packets. In the Chow Kit area in Kuala Lumpur, for instance, a roadside merchant at the Jalan Raja Bot market said that Gudang Garam and Luffman were his most popular brands priced at RM3.50 and RM3 for 12 sticks and 20 sticks respectively. Meanwhile, Canyon cigarettes sell at RM3 while John is priced at RM3.50 for a packet of 20 sticks. In comparison, a 20-packet of duty-paid cigarettes retails for RM12.
In Petaling Jaya, Selangor, foreigners opera-ting small sundry shops are selling more discreetly, hiding the illicit tobacco products under newspapers and behind the counter, while offering their illegal wares only to regular customers. Some even offer special discounts, giving customers who buy 20 to 30 packs substantial discount of up to 50 sen per pack!
Such low prices for illegal cigarettes simply means that claims by the legitimate players in the tobacco industry that four out of every 10 packs of cigarettes sold in the country are smuggled in somewhat easily believable!
Now wouldn’t you say that the nation has a new epidemic on its hand right now then?