AUG 30 — Controversy has raged over a proposal to introduce 10 stick packs of cigarette in Malaysia. On one side, these packs have been called “kiddie packs” by certain parties and concerns have been raised about access of these products to kids. On the other, the 10 stick pack proposal is aimed at actually addressing the serious illicit cigarette trade situation in the country, while also reducing overall consumption.
Several years after the small cigarette packs of 14 sticks were banned from Malaysia specifically because of the aim to push prices up and make cigarettes less affordable, we suddenly see a proposal that on the surface appears to be going against convention and international practice - a lot countries apparently have legislated on larger pack size.
At first instance, I would perhaps be inclined to defend the opponents of the small packs. But one point struck me, we are in a very serious and extraordinary situation. As much as there are health arguments against it, this has to be looked at closely from an economic perspective as well. It is not one perspective over the other.
One thing is clear – the country has a stunningly serious illegal trade problem. Set aside what the tobacco companies are saying, just go down to the corner grocery shop and carefully look. Yes, you will see the legal packs on display, but closer look you will actually see that under the counters, hidden below, are stacks of cigarette packs that are sold at very low prices. During a recent visit to one of these shops, I was stunned to see that these cheap products – no doubt illegal – were selling way more than the legal cigarettes were. More worryingly, even kids were buying.
So when Government data showed that over 70% of youths were smoking and buying cigarettes, I find it hard to think that they are buying anything but illegal cigarettes. The RM3-4 price point is the entry and that is way cheaper than any legal cigarettes in the market. Legally, there is a minimum price of RM10 which many if not all retailers either do not know or do not bother to comply with. So it is bad enough that a high proportion of youths are smoking, it is even more worrying that they are having illegal products.
When viewed from an overall consumption perspective and that 60 per cent of cigarettes in the country are illegal, it means that effectively Malaysia has predominantly an illegal smoking pandemic. As a consequence of this the country remains having high levels of smoking, the country is not getting any better on this smoking issue, but actually worse. The statistics from Ministry of Health itself suggest that estimated total number of smokers and daily consumption of cigarette is on the rise. On top of this, tax revenues have declined and legitimate jobs are lost.
That then begs the question – what’s the solution to this? It is very easy to take a narrow view and keep harping on enforcement. But is it really the silver bullet to solve this problem? The answer appears to be no – if not the problem would have easily been solved and illegal trade would not be at the levels it is now – almost 1 in 2 packs in the market are illegal.
The situation has reached a level that enforcement alone cannot make a dent on the situation. There is no amazing enforcement solution that could easily close our Malaysian borders and entry points to illegal cigarettes. This then leads to the question – how to address demand? This is where the proposal for a smaller pack becomes interesting. Having a 10 stick pack not only offers a legal, market-driven solution, but it could possibly reduce actual consumption.
As bizarre as it may appear to be, I asked my smoker friends (and those who actually smoking those questionable illegal brands) about this and they actually said that firstly, they wanted to buy legal brands – if the price was right. They are just where they are because they cannot afford a pack that’s RM17. But crucially, if the number of sticks were lesser, they would actually smoke less. It’s a case of less in hand (or pocket), less you consume.
This then makes the 10 stick cigarette pack proposal worthwhile to consider. We do get easily consumed by theory and concerns, by international dogma and recommendations but forgetting the actual situation that Malaysia is in. High levels of illegal trade is serious, it is real. It is something that is not experienced by other countries and therefore to dismiss this proposal without proper study would be foolish – especially since there appears to be no other effective, pragmatic and practical solution being proposed. It is worth a try and if it does not work, remove it.
I have read a lot of emotionally-charged comments from those opposing the proposal, many with valid concerns about the level of smoking in the country. But heavy smoking in Malaysia is being perpetrated by illegal cigarette trading and therefore that menace needs to be tackled first to have any chance of reducing the problem. Conventional measures have not worked, perhaps it’s time to give unconventional measures a try.