MALAYSIA can make a significant dent in curtailing its stubborn illegal cigarette issue by focusing enforcement efforts against top-selling brands of contraband cigarettes while tightening security measures around the nation’s coastal areas, said Advokasi Perusahaan dan Industri Sdn Bhd, a business advocacy group.
The remarks from Advokasi Perusahaan dan Industri Sdn Bhd follow a recent news report indicating that the top three selling contraband cigarettes in Malaysia, namely John, Canyon and Era account for more than 28% of all cigarettes sold in Malaysia.
“It is perplexing that the No. 1 selling illegal cigarettes brand in Malaysia, John, has a market share of over 30% of all cigarettes sold; translating into a loss of RM1 bil in tax revenue for the government each year,” said Advokasi Perusahaan dan Industri managing director Datuk Fazli Nordin.
“How can a brand that does not pay taxes and does not comply with any rules and regulations be allowed to grow and corner the Malaysian cigarettes market, enabling criminals to pocket more than RM500 mil in profit annually?”
Fazli claimed that the “so-called’ success and proliferation of top-selling illegal cigarette brands not only cause the government to lose money but also negatively impact the performance of legal industry players, sends the wrong message to foreign investors, fund crime and facilitate corruption.
According to Fazli, the negative multiplier effect of allowing illegal cigarette brands like John to flourish far exceeds the RM1 bil loss to the Malaysian economy.
Moreover, Advokasi Perusahaan dan Industri requested the unity government commit more time, effort, and resources to permanently eliminate top-selling illegal cigarette brands.
In doing so, Advokasi Perusahaan dan Industri is confident that the country will be able to bring down the prevalence of illegal cigarettes, which is currently close to 60%, in a tangible manner.
Fazli is of the opinion that enforcement is a critical success factor towards eliminating the top illegal cigarette brands, especially in the coastal areas that have become a popular soft spot for criminal syndicates to bring their contraband products in.
“Clearly, the government’s ban on transhipment has worked and must remain. Naturally, the criminal syndicates have pivoted to another modus operandi, taking advantage of our lightly guarded coastal areas.”
Fazli suggested that enforcement can be enhanced with more ‘boots-on-the-ground’, better technology like drones and CCTVs and improved training.
“In order to facilitate enforcement, our agencies must also be able to access up-to-date intelligence. This can be facilitated through engagements with at-risk communities within the coastal areas and perhaps a reward system be put in place for whistleblowing,” he added.
Furthermore, Fazli pointed out that there is a need for better engagement and information sharing between enforcement agencies and the legal industry.
“There is a brand of John cigarettes in the market that are sold legally, meeting the required minimum price and other regulations. The authorities and the ‘legal John’ should work closely together to investigate and take action against ‘illegal John’ to safeguard consumers and brand reputation.”
Meanwhile, Advokasi Perusahaan dan Industri is of the opinion that the government cannot afford the annual RM5 bil leakage caused by the illegal cigarettes market, more so as the Malaysian economy is struggling to get back on its feet after the COVID-19 pandemic.
“These top-selling illegal brands, which have the financial strength to operate above the law will certainly push their products to those banned from buying cigarettes.
“The very notion that Generational End Game will bring an end to illegal cigarettes is naive at best, given the proliferation of illegal cigarettes and the poor track record in enforcing against this problem,” noted Fazli. — May 24, 2023
Main photo credit: Buletin Sabah
