THE nationwide crackdown on illegal foreign-run businesses can only yield positive outcome if enforcement agencies target both sellers and licence holders who enable the illicit trade to continue.
Backing the call by Prime Minister Datuk Seri Anwar Ibrahim, the Federation of Sundry Goods Merchants Associations of Malaysia (FSGMAM) said the scale of the illegal cigarette trade at the retail level has reached a critical stage in the country.
A recent Wawasanex consumer perception survey published recently found that 83.8% of Malaysians purchased illicit cigarettes did so at sundry shops (kedai runcit) and Kedai Aceh (Indonesian-run sundry shop) with 73% identifying migrant workers as the primary sellers.
“The presence of migrant workers as the primary point of sale isn’t incidental. It’s the retail face of a network that begins with visa abuse and ends with an illegal product in the hands of a Malaysian consumer,” observed FSGMAM’s president Hong Chee Meng
“An estimated three million Malaysians made at least one illegal cigarette purchase in the past year.”
In addition, Hong also pledged that FSGMAM’s members are not the operators behind these sales.
“FSGMAM members are licensed, registered and compliant. We pay our taxes, hold our licences, and follow the regulations,” he insisted.
“The operators selling illicit cigarettes out of kedai runcit and Kedai Aceh are not our members. They don’t represent our sector and we wouldn’t allow our sector to be defined by what they do.”
‘Ali Baba practice’
Hong further denied that the association is has acted as intermediaries for foreign workers and collecting fees from them.
“Our mandate is to represent licensed, compliant merchants and that has not changed. Some associations have let this community down but FSGMAM has never,” he reiterated.
Hong viewed that the deeper problem lies with Malaysian licence holders who have ceded control of their premises to foreign operators, a practice widely referred to as an Ali Baba arrangement.
“Any Malaysian licence holder who sublets their licence or acts as a proxy for an illegal operation is not a victim of the illicit trade,” he opined.
“They are part of it. They are the enabling link that makes the entire illegal operation possible, hence they must face consequences that match that role. FSGMAM has no sympathy for them and neither should the authorities.”
Hong went on to reveal that the consequences extend beyond cigarette sales. When customers shift their purchases to illegal sellers, foot traffic drops and every other product on the shelf suffers.
“These are real businesses run by real families who contribute to the formal economy,” he justified.“Legal cigarettes are sold between RM12.40 and RM18.40 per pack. Illicit cigarettes go for as low as RM3. No legitimate trader can compete with that and they shouldn’t have to in the first place.”
Ultimately, FSGMAM renewed its call for a national blacklist naming all parties materially involved in the illicit trade – from sellers to the licence holders behind nominee arrangements.
“Raids end. Records don’t. A national blacklist that names sellers, premise operators and the licence holders behind them is the mechanism that will make the PM’s directive last beyond each enforcement cycle,” proposed Hong.
“We’re asking for one to be established without delay. A healthy retail environment is one where legal businesses can compete fairly and that begins by removing those who hide behind a legitimate sector’s name to operate illegally.” – July 2, 2026
