High prevalence of illicit cigarettes of 57.3% in 2021

The Illicit Cigarettes Study in Malaysia 2021 indicates that illicit cigarettes prevalence in Malaysia has dropped by 6.5 percentage points. The drop is from an all-time high of 63.8% in 2020.

The study is conducted by international market research company, Nielsen.

This is the first time since 2014 that illicit cigarettes prevalence has registered a decline. Yet, more needs to be done to address the issue because the government continues to lose billions of ringgit every year from unpaid taxes on illicit cigarettes.

“This indicates that the measures announced by the Minister of Finance in Budget 2021 are starting to bear results,” says a CMTM spokesperson.

“This is an encouraging development and CMTM urges the Government and all stakeholders to continue all efforts to curb the illicit cigarette trade.”

Very high illicit game

The illicit cigarette prevalence of 57.3% is still very high. Malaysia remains the number one country for illicit cigarettes. Smuggling syndicates are reacting to the Budget 2021 measures by employing new methods to bring the illicit cigarettes into Malaysia. 

CMTM calls on the Government to further enhance its enforcement to address the continuous smuggling activities. It says coastal areas should be watched while authorities should maintain and enforce Budget 2021 measures.

This includes a closer collaboration between the industry and Government to address tobacco smuggling activities through the Multi-Agency Task Force (MATF).

CMTM also calls on the Government to conduct a detailed regulatory and economic impact analysis and to engage all stakeholders across the entire value chain.

That is manufacturers, distributors, and retailers, prior to introducing proposals such as the Tobacco End Game 2040.

It says not consulting everyone may have the inadvertent effect of increasing illicit products in the market. In return, it will erode the hard-won gains in tackling the illicit cigarette trade in Malaysia.