Drastically Raise Cigarette Prices in Our Next Budget

The Government should raise cigarette prices to RM30 from the current RM10 for a pack of 20 sticks if it is really serious about curbing the smoking scourge.

This is because using “price and tax measures to reduce the demand for tobacco” is one of the most effective ways to reduce cigarette consumption among smokers and deter potential smokers. This measure is recognised by tobacco control experts and also the Parties in the World Health Organization (WHO) Framework Convention on Tobacco Control (FCTC), of which Malaysia is a Party since 2005.

(1 Malaysian Ringgit = HK$ 2.54) (Singapore retail price <Marlboro> HK$ 74 per pack.)

The Government should therefore aggressively implement Article Six of the World Health Organization’s Framework Convention on Tobacco Control (FCTC) by proposing a heavy tax on tobacco and its products at the coming National Budget.

At the present Minimum Cigarette Price of RM6.40, it is obvious that cigarettes are comparatively cheaper in Malaysia than countries that have serious anti-smoking measures. If we compare the price of a cigarette pack of 20s of a popular brand in Australia it is equivalent to RM52.00/ HK$ 132;  Norway RM45.00 /HK$ 114 ,  Ireland RM38.00 / HK$ 97, United States RM37.80 / HK$ 96,  United Kingdom RM32-00 / HK$ 81 and Singapore RM29.00 / HK$ 74.
(whereas Hong Kong price is only HK$ 50 per pack)
In a 2008 study, it was found that if taxes were to produce a 40% increase in cigarette price, the prevalence of the U.S. adult smoking would decrease from 21% in 2004 to 15% in 2025.
Closer to home, a country-wide research conducted in 2006 in Thailand to evaluate the impact of tobacco tax increase from 75% to 79%, leading to a 15% increase in price, revealed that 58% of smokers smoked less. Ten percent of the smokers surveyed had actually quit.

According to the Ministry of Health of Malaysia’s 3rd National Health and Morbidity Survey in 2006, there were almost 3 million smokers in Malaysia (made up roughly of 2.8 million adults and 0.2 million minors below 18 years of age).

Malaysia has a smoking prevalence of 23.1% among adults and an extremely high smoking prevalence of 30.9% among boys aged 13-15. Contrast the smoking prevalence in Singapore which has much higher cigarette prices (about RM29.00 / HK$ 74 for 20). Singapore has a smoking prevalence of only 14.3% among adults and an even lower smoking prevalence of only 8% among boys aged 13-15. This clearly shows the effectiveness of high cigarette prices in Singapore in curbing smoking prevalence especially among young people.

To successfully curb smoking, which is a bane to the government in terms of costly treatment of smoking-related diseases and loss of human productivity and resources through diseases and deaths, the way forward is to raise tobacco taxes causing cigarette prices to go beyond the affordability of the youth and the poor, our most vulnerable groups.

CAP also calls for a drastic price increase because gradual price increases over the years may not be as effective. Smokers may initially complain about it but eventually become desensitised to such increases and even rationalize it as inflation. Moreover, if the price increase is gradual, smokers may still able to buy their cigarettes by trimming their personal or family expenditures.
As it is shown in studies in Thailand, Singapore, Canada and the U.S., smokers are likely to discontinue their habit if the MCP is increased drastically such as what the Consumers Association of Penang (CAP) proposed at RM30. Feeding the smoking habit then becomes no longer tenable as the increase is too painful and unsustainable, particularly among the poor and the youth.

It is noticed that in recent weeks, the media has been harping on what is often argued by the tobacco industry that an increase in cigarette price may invite rampant smuggling activities, even more so when Malaysia has such a long coastline of 4,675 km.

Besides strict enforcement of the existing Control of Tobacco Products Regulations, there are ways to curb this scourge such as by “prohibiting or restricting, as appropriate, sales to and/or importations by international travellers of tax- and duty-free tobacco products” as FCTC recommended under Article 6.

Malaysia can remove cigarettes from duty-free list and also limit licensing the sale of cigarettes and tobacco products to only tobacconists. This would mean that the government has a control over the number and distribution of such retail outlets in the country.

The government should also seriously consider introducing mandatory jail sentence for smugglers, dealers, retailers and consumers. Consumers who purchase smuggled cigarettes should also be jailed because they are wilfully abetting dangerous and illegal activities. They are like people who buy stolen goods.

Properties and assets of smugglers and dealers should be seized, not just the consignment of smuggled cigarettes and vehicles. It is because smuggled cigarettes are even more dangerous, often have higher levels of nicotine and tar, and contaminated with lead, cadmium and arsenic.
It is known that cigarette smuggling is popular with criminals in many countries because the penalties are “less severe than [for] other crimes like drug smuggling.” Similarly in Malaysia, there is not much of a detrimental punishment for these smugglers who bring in cigarettes that are known to be filled with saw dust to cut production cost, contaminated with rat droppings and other hazardous chemicals.

CAP therefore calls on the government to drastically raise the price of cigarettes to save the future generations from becoming nicotine addicts, and families and the Government from spending exorbitant amounts to treat smoking-related diseases. The best pre-emptive measure is to increase the price of cigarettes, complemented with other FCTC recommendations.

It is ironical that Malaysia has done so little to fight tobacco consumption as tobacco has nicotine which is five to 10 times more addictive than cocaine or morphine. Smoking is also one of the biggest causes of preventable illness and premature death.

http://www.consumer.org.my/index.php/health/lifestyle/585-drastically-raise-cigarette-prices-in-our-next-budget

Tob Control2006;15:125-130 doi:10.1136/tc.2005.013292  Research paper

Cost of tobacco-related diseases, including passive smoking, in Hong Kong

Results: In the Hong Kong population of 6.5 million in 1998, the annual value of direct medical costs, long term care and productivity loss was US$532 million for active smoking and US$156 million for passive smoking; (total HK$ 5.366 billion) passive smoking accounted for 23% of the total costs. Adding the value of attributable lives lost brought the annual cost to US$9.4 billion (HK$ 73.32 billion).

Conclusion: The health costs of tobacco use are high and represent a net loss to society. Passive smoking increases these costs by at least a quarter. This quantification of the costs of tobacco provides strong motivation for legislative action on smoke-free areas in the Asia Pacific Region and elsewhere. http://tobaccocontrol.bmj.com/content/15/2/125.abstract

(note : this HKU study reflected costs to HK society in 1998 – a new study is underway to compare current costs )