Punitive Generation End Game (GEG) Bill brings severe economic impact

THE Control of Smoking Products for Public Health Bill 2023 which incorporates the Generation End Game (GEG) bill is expected to cause job losses, business closures, severe social impact to the lower income group and potentially impacting the nation’s attractiveness as an investment destination due to restrictions imposed by the bill.

While some changes to the bill are welcome – and that it is deemed a watered-down version of the original bill that was tabled last year – its damage to the tobacco ecosystem will be permanent.

The GEG bill introduced by Malaysia is punitive and punishing to all in that businesses may find it tough to implement certain provisions of the law and in some cases will even escalate compliance costs.

With higher compliance costs associated with the bill, businesses may find it tough to remain profitable in already tough economic conditions. Some may have to resort to shutting down their business, leaving thousands of workers jobless or in other cases, businesses may have to resort to cost-cutting measures to ensure the overall cost is contained.

Vape wiped-out?

As the revised bill will maintain the ban on e-cigarettes and vape products, vape and vaping products are the biggest casualty. Even as the government has removed liquid nicotine from the Poisons Act 1952 on March 31 which has enabled tax to be imposed on e-liquids with nicotine with effect from April 1, there remains a concern on the regulatory framework.

As the industry is growing strongly – employing more than 31,500 workers and close to 10,000 businesses – the bill will see the growth of the vaping industry curtailed as it does not recognise vaping as a tobacco harm reduction (THR) tool.

The industry which boasts a business volume of more than RM3.48 bil and employs mostly ethnic Bumiputera risks being wiped out if the tobacco bill presented in the Dewan Rakyat is passed.

Recognising harm reduction strategies crucial

While Malaysia is adamant in introducing the GEG bill and following the footsteps of countries like New Zealand, we have certainly not taken the right steps in addressing tobacco addiction with cleverly structured programmes that will enable smokers to quit their habit for good.

In fact, THR are well-accepted strategies alongside the use of studies conducted in the UK which have shown that it is not nicotine in itself that is harmful to human health but rather its consumption in the form of traditional, combusted cigarette smoking.

Hence, Malaysia must move towards not only adopting THR strategies to combat the prevalence of smoking but also introducing legislation to govern the sale and scope of what is sold to the public.

Pankaj Kumar

Rise in illicit trade

The outright ban on the sale of tobacco products for those born after 2007 will result in the incidence of illicit trade rising by 3.3 percentage points, notably from 56.6% as of end-2022 to as high as 60%, thus fuelling the size of the illicit market to jump to RM5.9 bil based on the latest data, thus resulting in losses of RM283 mil to the government in the form of uncollected taxes.

On the contrary, if Malaysia were to adopt a THR strategy, it stands to benefit in the form of lower healthcare costs due to lower smoking prevalence.

Based on the study conducted in the UK and if we are able to achieve the same success rate, Malaysia’s healthcare cost related to smoking can be reduced by up to 18% or RM1.33 bil by 2025 on the assumption that there is between 2.9% and 4.5% reduction in smoking prevalence.

Suffice to say that on the overall, the GEG bill has dire consequences to society and businesses. The watered-down bill ought to address Malaysia’s approach towards adopting THR strategies with clear regulations and legislation that will govern the sale of e-cigarettes.

In addition, enforcement will be a key element in implementing the proposed bill – an area that Malaysia finds it difficult to measure up as evidenced by almost 60% illicit trade in the country while promoting vape and vaping activities should be continued and not curtailed.

We must recognise that vaping is a tool for smoking cessation as proven in countries like the UK and New Zealand. – Oct 7, 2023


Pankaj Kumar is the managing director of Datametrics Research and Information Sdn Bhd, a Malaysian-based policy think tank committed to performing research and advocacy for key sectors that are critical to the Malaysian economy. 

The views expressed are solely of the author and do not necessarily reflect those of Focus Malaysia.

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