KUALA LUMPUR, Feb 4 — The Malaysian Vape Chamber of Commerce (MVCC) has called on the government to regulate the industry as it is no longer a niche market.

Valued at RM2.27 billion, the vape industry is “too substantial to remain unregulated.”

While the government has already implemented an excise tax on vape devices and e-liquids since January 1, 2021 MVCC believes that the tax regime needs to be broadened to include e-liquids with nicotine which make up 97 per cent of the Malaysian market.

In a statement issued in conjunction with the launch of its “Study on the Malaysian Vaping Industry” report, MVCC wants the government to immediately introduce “appropriate regulations to create a positive multiplier effect to the Malaysian economy.”

“Our data strongly indicates that this sector is a viable and growing industry in Malaysia and can contribute significantly to the local economy. It has already facilitated the growth of local entrepreneurs, many of which are local and Bumiputera businesses,” said Syed Azaudin Syed Ahmad, president of MVCC.

He added that the industry has “an established ecosystem comprising manufacturers, importers and retailers, and a growing distribution and logistics network.”

MVCC said it spearheaded the study “in order to provide the government with a solid data-driven foundation to immediately introduce regulations on the vape industry.”

Some key findings from the study include:

  • The workforce in this industry are mainly young adults, under 30 years of age, and predominantly of Malay ethnicity;
  • There are 1.12 million vapers in Malaysia based on Ministry of Health’s data
  • The ethnic profile of vape users reflect the national race composition — Malay (70 per cent), Chinese (25 per cent), Indians and others (5 per cent);
  • Ninety-four per cent of vape users have a history of smoking cigarettes, and the top reasons given for choosing to vape are as a means to quit smoking cigarettes (57 per cent) and because it is less dangerous as compared to smoking cigarettes (56 per cent);
  • Public Health England, a government health agency in the UK, has published expert evidence that finds vape to be 95 per cent less harmful than smoking cigarettes. This is supported by many renowned public health experts and anti-smoking advocates including the Ministry of Health in Canada and New Zealand.

“The Malaysian vaping industry has significant potential that can be unlocked with practical and comprehensive regulation that must include the use of e-liquids with nicotine. This will spur the growth of SMEs, which will in turn create jobs and generate tax revenue for the government,” said Syed Azaudin.

He added that Malaysia is in a good position to attract FDI into this sector. “MVCC believes the vaping sector is ready and capable to attract quality FDIs given its established ecosystem that global investors and multinational companies would find appealing.”

According to a study conducted by Grand View Research Inc, the global e-cigarette and vape market size is expected to reach US$67.31 billion (RM272.54 billion) by 2027.

The “Study on the Malaysian Vaping Industry” — a first-of-its-kind in the country — was conducted by Green Zebras, a market research agency.

The findings show that there are more than 3,300 businesses related directly to the vape industry, with a workforce of more than 15,000 workers.

It is further estimated that workers in the vape industry were paid up to RM450 million in wages in total in 2019 alone.

To download the full report, visit the MVCC’s website or Facebook page.