Global consumer advocacy group urges Malaysia to use Budget 2021 to address tobacco black market

Roeder said illegal cigarettes now command 62 per cent of the total market share cigarettes sold, making Malaysia the number one in the world for this black market. ― Picture by Miera Zulyana
Roeder said illegal cigarettes now command 62 per cent of the total market share cigarettes sold, making Malaysia the number one in the world for this black market. ― Picture by Miera Zulyana

KUALA LUMPUR, Sept 9 — An international consumer advocacy group is urging the government to use the upcoming Budget 2021 to implement measures to address the tobacco black market. 

Consumer Choice Center (CCC) wants the Malaysian government to take action against the tobacco black market and illicit trade, which it said is growing to become a serious threat to society and legal businesses.

Its managing director Fred Roeder said consumers are exposed to the risk of poorly-made and unregulated products with the black market.

“Transnational organised crime of illicit trade is a US$870 billion (RM3.6 trillion) problem. The global black market is not only immense but also growing rapidly. It is interesting to note that globally, the tobacco black market is higher in value than the illegal trade in oil, wildlife, timber, arts, cultural property, and blood diamonds combined,” he said in a statement.

Roeder argued that things are even more critical as illegal cigarettes now command 62 per cent of the total market share cigarettes sold, making Malaysia the number one in the world for this black market.

“Naturally this acute problem has and will continue to cause a severe drag to the economy while hurting consumers at large,” Roeder added.

In CCC’s recently-launched policy paper “Illicit Trade is Dangerous for Consumers”, it was found the tobacco black market damages public health and has been proven to finance organised crime. 

Additionally, it targets vulnerable groups in society while consumers are impacted because illegal cigarettes are produced in unsafe environments and using unsafe products.

It also highlighted that small retailers suffer considerably from the tobacco black market as they not only lose legitimate cigarette sales but also other items adult smokers usually buy from them.

“In addressing the tobacco black market, the Malaysian government should look into moderating tax policies to ensure that tax regimes do not create demand for more harmful illicit alternatives. 

“Simultaneously the government should increase the existing penalties for black market perpetrators and enforce these penalties dedicatedly, as the black market situation globally and in Malaysia is expected to deteriorate since consumers will turn to cheaper alternatives due to job security and income stretch resulting from the global Covid-19 pandemic,” he said.

The policy paper is available at consumerchoicecenter.org.

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