Illicit cigarette trade study funded by tobacco industry

26 August 2019
Dr. Ulysses Dorotheo

I AM responding to the article, “Illegal cigarette trade ‘beyond crisis point’, says Japan Tobacco International Bhd (JTI) Malaysia” (NST, Aug 6).

JTI claimed Malaysia was in an unenviable position of being a global leader in illicit cigarette penetration and put the figure at 60 per cent, a two per cent increase from the previous year’s 58 per cent.

Whenever the government decided to increase tobacco taxes, the industry routinely voices its opposition to them.

Therefore, several statements need to be corrected and clarified, including information that was left out.

FIRST, JTI did not disclose that the high illicit trade estimates were from an Oxford Economics study funded by the tobacco industry.

The methodology of Oxford Economics’ studies on illicit trade in tobacco in Asia has been exposed as flawed.

The figures were exaggerated and intended to dissuade governments in Asia from increasing taxes.

SECOND, the tobacco industry often claims to be the victim of smuggled and counterfeit tobacco, despite growing evidence from government investigations, whistle-blowers and leaked documents that suggest industry involvement.

A University of Bath study revealed that about 70 per cent of smuggled cigarettes were derived from the tobacco industry.

THIRD, JTI opposed tax increases on tobacco in the Philippines this year when Congress was considering a bill to increase tobacco tax rates and use the revenues to fund A universal healthcare plan.

It touted the same arguments that tax increases would worsen smuggling.

Fortunately for the Philippines, Congress approved the tax increase, which will bring in an additional 15.7 billion pesos (RM1.2 billion) in the first year to fund the universal healthcare plan.

The World Bank and experts say taxation is not the main driver of smuggling.

A World Bank report said the true incidence of tobacco smuggling in Malaysia is likely to be about half of what the industry claimed. Singapore, Australia and Hong Kong have higher tobacco taxes than Malaysia but a lower illicit trade.

The tobacco industry’s arguments against tax increase were also echoed by its supporters, giving the deceptive impression of public support.

Another letter, “Illicit cigarettes a national threat” (NST, July 27), referred to the same Oxford Economics report, and echoed the tobacco industry’s concerns about how Malay-sia has the highest number of illicit cigarette smokers in the world.

While the letter writer offered no affiliation, he is a professional public relations consultant, whose client list includes Malay-sia’s largest tobacco company.

The former president of Transparency International-Malaysia also seems to be caught up in promoting the arguments of the tobacco industry, and was quoted in the industry-funded Oxford Economics report.

JTI called for the government to amend the Poisons Act 1952 to declassify nicotine as a poison, so that it can sell its new nicotine-based products to Malaysians.

This was an irresponsible call to increase profits while keeping people addicted to nicotine.

More than 40 countries worldwide, including five Asean countries — Brunei, Cambodia, Laos, Thailand and Singapore — have banned these products.

Recently, there have been reports of children vaping and being addicted to these new products.

Yet the government is hesitant to ban them.

We urge the government to protect public health by increasing tobacco taxes and maintain nicotine’s classification as a poison under the Poisons Act and keep it out of the hands of children.


Executive director, Southeast Asia Tobacco Control Alliance