Page 22 - WAD BEYOND GLOBAL June 2020

FEATURE

NO BREATHING SPACE FOR TOBACCO FIRMS

AS ILLICIT TRADERS GET INNOVATIVE

By Kang Siew Li / The Edge Malaysia Weekly

TOBACCO companies, which were already facing challenges
with illicit cigarette sales before the Covid-19 pandemic, have
had no respite as their illegal counterparts have come up with
innovative ways to attract customers as the country remains
under partial lockdown.

Illicit cigarettes are being sold online and food delivery
providers are bringing them to the doorstep. This is expected
to continue even after the pandemic comes to an end.

Like all other consumer goods sectors, tobacco companies
have been impacted by the reduced economic activity during
the Movement Control Order (MCO). They are not allowed
to replenish their products as cigarettes are not considered
essential goods.

In an April 8 report, CGS-CIMB Research cited a survey
conducted by the Department of Statistics Malaysia that
shows average household spending on alcohol and tobacco
during the MCO period fell significantly, by 64.3% to RM35,
compared with the pre-MCO period. While anti-smoking
proponents may see this as an opportunity for people to quit
smoking, the concern is that smokers are switching to illegal
products.

British American Tobacco (Malaysia) Bhd (BAT Malaysia)
managing director Jonathan Darlow Reed, tells The Edge
that illegal tobacco traders are profiteering from a national
health and economic crisis. “Because of the supply restrictions
imposed upon legitimate tobacco manufacturers, illegal
operators have a virtual monopoly. Consumers are being
forced to turn to cheap, contraband cigarettes.”
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