Cigarette discount ban in the works

Malaysia is preparing to approve a policy that will ban discounts on cigarettes in an attempt to continue smoking, Philip Morris (Malaysia) Sdn Bhd Corporate Affairs Director Richard James.

Tobacco companies are now allowed to offer a discount up to 5% of the retail price for one month, up to three times a year. These stocks are usually carried out by tobacco companies to introduce new products.

James said, Philip Morris, which makes Matlboro online and, there is a problem with the proposed plan of the Health Ministry as tobacco players were informed of the move and have enough time to respond.

“If the idea of a smoking bans to make it less accessible, then we have no problem with that. Actually, we got to know in advance what movements and preparing for it,” he said in an interview SunBiz.

However, James said that the ban on price discounts has not been declared so it is unclear when it will be done.

“Even though the ban has not yet been published, we know that it is the intention of the government. So we have to keep in mind is to make sure that we do not include price discounts for cigarettes in our business plans in the pipeline,” he added.

The Ministry has recently announced that the new price floor on 20-stick cigarette packs will RM7, compared to RM6.40, and only a pack of cigarettes with 20 sticks can be sold from September 1. The new regulation is aimed at reducing opportunities for children, youth and low-income people to buy cigarettes.

“In addition, we do not have any problems with the new rules, (we know that) every time the excise tax increase, the minimum price will also increase. For 20-stick pack decree was imposed a standard format for the execution and monitoring purposes smuggling of tobacco products and the prices are too many options, “said James.

He added that Philip Morris understands the need to regulate the tobacco industry, as smoking is harmful and addictive.

“But as long as the rules are reasonable, but not extreme, and while we can tailor our business (as amended) in a reasonable time, then we would not be against them. Australia’s recent decision to support the simple act of packing (which says that tobacco products should be in a simple package and carry graphic health warnings) is an example of extreme policies that we think that there is no scientific evidence to support this. Moreover, policies aimed at demonizing the industry, “he said.

James believes the rules Malaysia and tobacco prices of one of the strictest in the Asia-Pacific region.

“Not only do you have the laws on the minimum selling price of cigarettes, the Ministry of Health must also approve all retailers offer price of tobacco products before they can sell them. Malaysia is one of the few countries in the world to do so.

“Injurious to health by tobacco products (with the image of patients, lung cancer and throat) are also among the largest in the region, after Australia, covering at least 40% before cigarette packages and 60% on the back,” James said, adding that there is a complete ban on the advertising of tobacco products in the country.

In Malaysia, Philip Morris is the third largest player after cigarettes British American Tobacco (M) Bhd and JT International Bhd, with a 15% market share.

James said the illegal tobacco trade, which accounted for 34.7% of all cigarettes sold in the country, continues to pose the greatest threat to the legal tobacco players like Philip Morris.

“These illegal cigarettes are usually brands, which are manufactured in Cambodia, the Philippines and Indonesia, and some of them are probably not registered brands in these countries. Although illicit trade effect will always be present in Malaysia from due to geography and the realities of government resources the Authority, we believe that (34.7%) level today is still too high, and we think that it can be brought up to a more acceptable level.

“We believe that the government loses about RM2 billion each year in lost excise taxes on tobacco market. This is a great incentive for the government in terms of picking unrealized gains,” he said.

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