Tobacco players agree to ruling, want strict enforcement

theSundaily PETALING JAYA (Aug 15, 2012): Tobacco companies said they would comply with the government's new minimum-price ruling of RM7 for 20-stick packs come Sept 1, but want strict enforcement to ensure compliance by retailers.

British American Tobacco (Malaysia) Bhd (BAT Malaysia) corporate and legal affairs director Christine Lee said the regulation on minimum price has been in place since January 2010, with the aim of making cigarettes less affordable, especially to youth.

"As a responsible company, BAT Malaysia will comply with all sensible regulation enacted by the government governing the sale of our products," she told SunBiz today.

"However, there are still a high number of illegal cigarette brands being sold at extremely cheap prices of between RM2.50 and RM4.

"As such, for the laws to be effective there must be strong enforcement and strict penalties for non-compliance. We hope that the Health Ministry will continue its good efforts in the enforcement of cigarettes that are still being sold below the minimum price," said Lee.

JT International Bhd (JTI Malaysia) said while it has yet to receive an official letter from the Health Ministry on the amendments to the Control of Tobacco Products Regulation 2004, it will comply with the new requirements.

Its managing director Shigeyuki Nakano, however, warned that the new requirements can only be effective if there is strong and strict enforcement to ensure proper compliance by retailers.

"Otherwise, illegal cigarette traders will likely take advantage of the situation to increase illegal cigarette sales," he said in a statement.

Nakano added that the widespread sale of illegal cigarettes at below the mandatory minimum cigarette price of RM7 for a pack of 20 sticks remains a major concern. The latest Illicit Cigarettes Study commissioned by the Confederation of Malaysian Tobacco Manufacturers (CMTM) recorded the illegal cigarettes level at a high of 34.7% during the March-May 2012 period.

"We believe that with enhanced and stricter enforcement, coupled with increased awareness among retailers on the minimum cigarette price requirements, the sale of these illegal brands can be curtailed," he said.

Both BAT Malaysia and JTI Malaysia also see no impact from the ruling that tobacco companies can only sell 20-stick packs as they currently do not carry other packet sizes.

On Tuesday, Health Minister Datuk Seri Liow Tiong Lai announced that the minimum price of all cigarette brands will be RM7 and only cigarette packets with 20 sticks can be sold come Sept 1. The new ruling is aimed at reducing the capability of children, youngsters and the low-income earners to buy cigarettes.