Datametrics Research and Information Centre (DARE) welcomes the Control of Smoking Products for Public Health Act 2024 (Act 852), which was passed by Parliament in November last year, gazetted in February this year, and enforced with effect from 01 Oct 2024. However, we urge the Government to relook at punitive regulations like the planned display ban that will hit retailers the hardest.

Act 852 represents great strides in Malaysia's efforts to regulate tobacco and vaping products. At the same time, the Control of Smoking Products For Public Health (Control of Sale) Regulations 2024 (Regulations) also came into force on the same date. However, given the sensitivity of the implication of Act 852, the full effect of the new legislation and regulations will only kick in upon the expiration of the grace period to allow time for industries to transition and adapt to the new law. 

Pankaj Kumar, Managing Director of DARE, said, “The new legal framework and regulations that will govern and control what is sold in the market, including the display ban on all smoking products, requires a rethink as it has serious repercussions on businesses and business owners.”

Under Regulation 6(1), a retailer or any person shall not display, cause, or permit to be displayed any tobacco product, smoking substance, or substitute tobacco product except at specialised stores; and under Regulation 6(2), notwithstanding Regulation 6(1), the tobacco product, smoking substance or substitute tobacco product displayed in the specialised stores shall not be seen conspicuously outside the store.

In addition, the regulation has also now defined what are “specialised stores”. These are, in essence, any fixed place of business or premise that is licensed by the authority solely to sell tobacco products, smoking substances, or substitute tobacco products. 

Pankaj believes these are very harsh rules for product owners as they are now left with two choices. “Either they sell these products in their own shops, which allows them to display the products, or they can continue to sell in other retail stores but only if retailers do not display these products.”

According to Pankaj, it is a lose-lose game because the costs will be on the store owner. To continue smoking product sales openly, they now would need to invest in a specialised outlet set-up, which can be costly not only in upfront cost but also in monthly rental payments and operating overheads. And to continue selling their products at multi-category retail stores, where the bulk of smoking products are sold, would imply costs on the retailers instead. 

“Irrespective of their chosen path whether to sell their products in specialised shops only or continue current retail options, it is going to incur huge costs even before considering the harsh punishments for violations under Act 852,” he added. 

Offences under the Act carry heavy penalties depending on whether the offender is a body, corporate or otherwise. For the first offence, a person shall be liable to a fine not exceeding RM20,000 or to imprisonment for a term not exceeding one year, or to both, and a fine of not less than RM20,000 and not exceeding RM100,000 or to imprisonment for a term not exceeding two years, or to both, for a body corporate. For the second or subsequent offence, a person will be liable to a fine not exceeding RM30,000 or to imprisonment for a term not exceeding two years, or to both, and to a fine not less than RM50,000 and not exceeding RM300,000 or to imprisonment for a term not exceeding 3 years, or to both, for a body corporate. 

“These are massive fines to retailers who have long engaged in the sale of tobacco and other smoking products, given the history of tobacco manufacturing in Malaysia. These penalties would be catastrophic to smaller establishments and those in rural areas who may not have enough margins to take on the financial needs to adapt to new laws”, according to Pankaj.  

Under Regulation 7(1), any retailer or person who sells tobacco products, smoking substances, or substitutes tobacco products, whether in a specialised store or otherwise, shall, at all times, conspicuously display a warning sign as specified. 

“These warning signs, which come under a prescribed size and wording, are added cost to the retailers and will lower their business income”, Pankaj adds. 

DARE opines that it is unlikely that current retail outlets involved in selling tobacco products will take the trouble to set-up what is now defined as a “specialised store” as the cost-benefit analysis will likely not be in their favour. Selling these products in the current set-up will be challenging to implement given the strict limitations imposed under the Act. 

Pankaj urges, “The government ought to re-look at some of these measures as the current legislative requirement for the sale of tobacco products is impossible to implement. Worse, the government too will be bogged down with huge responsibility in enforcing the law itself given the depth and breadth of the country where tobacco products are sold”. 

“The government certainly could better use their resources towards the research of new alternative nicotine products that have evidenced their tobacco harm reduction effectiveness abroad. It would also be prudent to investigate multi-agency enforcement efforts that can bring larger and more positive impact to society at large, such as to tackle the prevalence of illicit tobacco sales,” he concluded.

#DARE #SmokingProductBan #PublicHealth #TobaccoRegulation #RetailImpact #MalaysianBusiness

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