Malaysia is world No.1 consumer of illegal ciggies

General Manager of JTI International Berhad Cormac O' Rourke, briefs on illegal cigarette trade by Japan Tobacco International Malaysia.The study was conducted by Nielsen and commissioned by the Confederation of Malaysian Tobacco Manufacturers.

KUALA LUMPUR: Malaysia has become the largest consumer of illegal cigarettes with over 12 billion sticks sold last year.

The situation can only be addressed by a more sustained level of strategic enforcement to curb the supply and demand for these illegal cigarettes.

JT International Bhd (JTI) ma­­naging director Cormac O’Rourke said Malaysia is one of the few countries in the world where illegal cigarettes sales continue to thrive unabated with the situation now surpassing crisis le­­vels.

“While the Customs Depart­ment is tasked with leading the enforcement, the sheer size of approximately 12 billion sticks of cigarette sold annually indicates that more needs to be done and a collective multi-agency approach is now desperately required to improve the situation,” he told reporters at JTI here on Tuesday.

He said the lack of effective and coordinated enforcement is one of the key reasons why enforcement efforts have not been able to contain and stop illegal cigarette sales.

“This has enabled cigarette smugglers to manipulate existing policy loopholes and take advantage of porous borders as main smuggling routes into the country,” O’Rourke said.

A study conducted by research house Nielsen and the Confe­de­ration of Malaysian Tobacco Ma­nu­­facturers showed that illegal cigarette sales were most widespread in Sabah, Sarawak, Pa­­hang, Kelantan and Tereng­­ga­nu.

The study also found that 58.9% of all cigarette sales in the country were illegal cigarettes.

O’Rourke proposed three measures to comprehensively address the sale of illicit cigarettes such as introducing an excise moratorium for the next three years to prevent price shocks leading to more smokers switching to illegal cigarettes.

“We should look at banning transshipment of cigarettes at entry points in Malaysia and introducing a single point of entry for any importation of cigarettes into Malaysia.

“Transshipment has been manipulated by smugglers where the shipment of cigarettes arrive here supposedly bound for another country, but it never leaves and in the end finds its way into the local market,” he said.

He said an independent body should also be set up to lead a special task force on addressing illegal cigarette sales comprising multiple government agencies, including industry representatives.