NOTE: This story has been amended for greater accuracy.
TOBACCO companies have said there are reasons for introducing small cigarette packs in Malaysia. Responding to The Star, they also pointed out that these were not “kiddie packs”, but smaller packs of 10 sticks.
This is British American Tobacco Malaysia’s statement in full:
There is no proposal to introduce kiddie packs in Malaysia. Nor the figurative “kiddie packs” either.
There is however a proposal to allow for the sale of smaller packs of 10 sticks to adult smokers. There is a difference.
Firstly, there is a segment of adult smokers who have chosen to continue smoking and because they are unable to afford a pack at RM17, they have resorted to smoking illegal cigarettes at RM3-5. That is a reality.
The objective of smaller packs is to provide a legal alternative to this segment of adult smokers. Presently there is no such alternative. It is either the unaffordable legal packs or the very cheap illegal cigarettes.
We also believe that adult smokers do regulate consumption with smaller packs.
Secondly, it is illegal to sell cigarettes to youths in the first place. For the 70% of youths who already have access to illegal packs as cheap as RM3 (for 20 sticks), we fail to see the contention of how a pack of only 10 sticks sold at, say, above RM6 is supposed to be relevant to these youths.
As far as the legal industry is concerned, our consumers are and will always be adult smokers, and the biggest threat to our business is illegal cigarettes that have a market share of up to 60%.
The illegal supply chain network is constantly evolving to make enforcement challenging. Enforcement and penalties are key, and we have and will continue to stress these points. At almost a 60% illegal cigarettes incidence, we need to do things differently or it will continue to climb higher.
Small packs of 14 sticks were banned in 2010 whilst small packs of seven and 10 sticks were banned several years before that. Since then, excise on cigarettes has, over the years, increased significantly.
Theoretically, total consumption should have decreased if the simplistic conclusion is that if people cannot afford to smoke, they would quit. However, statistics independent of the tobacco industry have shown that total consumption of cigarettes has increased. People have just moved from legal to illegal cigarettes.
As such, we believe that demand must be addressed through smaller packs, and for this tool to be used for a period of time to address the growth of illegal cigarettes first.
British American Tobacco Malaysia
This is JT International’s statement in full:
Small packs are not “kiddie packs”. They are not meant for kids and are not in any way targeted at kids.
Illegal cigarettes are the real “kiddie packs” – they are sold at RM3-5 per pack and have garnered close to 60% of the market. These are the ones that have caused youths to start smoking.
The explosive growth of illegal cigarettes over the years has raised overall tobacco consumption and the number of smokers, with three million out of the estimated five million smokers in the country now smoking contraband products.
This has also impacted legal businesses as well as the overall revenue the Government collects in taxes.
Over the years, numerous enforcement initiatives have been taken by the Government, and these efforts have been challenged by significant and continuous consumer demand for cheap illegal cigarettes, given the huge price gap between legal cigarettes and illegal cigarettes.
Having small packs (10-stick packs) in the market will plug this price gap and give smokers of illegal products a chance to choose legal products.
It is not about making legal cigarettes cheap, as the price per stick of cigarettes will be equivalent or slightly higher given that the tax rate is the same.
At the same time, this also gives a chance to smokers to moderate their consumption as they may opt to reduce their current consumption with the availability of 10-stick packs in the market.
Malaysia is going through an extraordinary situation that requires practical measures that really tackle the problem. The small packs are not a silver bullet, but together with greater enforcement, they will have an impact.
Malaysia is in an illegal cigarette trade crisis that is fuelling total consumption, and this requires bold and pragmatic measures that address the current situation.
We acknowledge the strong views and opinions against the small packs, but there is a critical absence of real solutions being put forward to tackle the problem, other than calls for more enforcement.
In addition, small packs have not caused an increase in total consumption, or the number of smokers and youths taking up smoking in Malaysia for the past 10 years. Illegal cigarettes did.
Based on Ministry of Health’s studies, these increased even after small packs were discontinued, while legal volumes have declined significantly in the last 10 years.
Malaysia is facing a deluge of contraband cigarettes. We believe that the introduction of 10-stick packs presents a solution to reduce illegal cigarettes by up to 55% from the current critical level and lower overall consumption by 12% by 2020.
Meanwhile, public opinion on the issue seems split.
In a poll on The Star Online on Sept 5, 67% of 2,100 respondents supported the move to bring back the little pack.
Those who agreed said removing kiddie packs had not deterred smoking anyway (50%), or that the revenue from lost taxes can be used for the greater good (17%).
Up to 22% voted against the proposal as it would encourage smoking. They wanted the Government to look at other methods to combat the illicit trade.
And 11% felt Malaysia should abide by the Framework Convention on Tobacco Control, which it signed in 2003 and ratified and enforced in 2005.
However, Public Health Malaysia pointed out that in a poll it conducted on the same day on its Facebook page, 60% of the respondents rejected the proposal that the pack should be re-introduced.
Of the 2,340 respondents, more than 1,400 people or 59.8% rejected the proposal to bring back the kiddie pack while 550 people or 23.5% supported the proposal.
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