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Demand for illicit cigarettes heightened amidst MCO in Asia Pacific

RETAIL and Trade Brand Advocacy (RTBA) said the travel restrictions, movement control order (MCO) and tighter scrutiny by enforcement agencies at border checkpoints and expressways have done nothing to disrupt the illicit trade supply chain in Malaysia.

“Recent feedback from industries and enforcement agencies indicated that instances of illicit trade in Malaysia remain high as syndicates and perpetrators utilise innovative ways to circumvent the more intense spotlight cast by the authorities due to the Covid-19 pandemic,” its managing director Heath Michael said in conjunction with the launch of the RTBA’s Illicit Tobacco in the Asia-Pacific Region: Causes and Solutions report today. 

RTBA is a non-governmental organisation that safeguards businesses from criminal conduct.

“In the case of illicit tobacco trade in Malaysia, our research has found that demand for illicit cigarettes has increased during the MCO period as legitimate manufacturers are not allowed to distribute cigarettes, which are not considered as essential items.

“The syndicates have intensified their use of e-commerce and social media platforms along with e-hailing and courier services to meet the heightened demand.

“This trend is worrying as it defeats the national health agenda to encourage Malaysians to quit smoking during MCO while extending the government’s loss of revenue,” Michael added.

He added that Malaysia is not only losing more than RM5 bil annually in revenue to illicit tobacco trade but it has, together with China, Vietnam, Indonesia and Singapore, also been identified as a lead vector in the spread of illegal tobacco throughout the region.

“We found that illicit tobacco, primarily manufactured in China, is shipped into Malaysia before being distributed across the rest of Asia, and further destinations, including Australia. We expect this transnational supply chain to remain intact as multinational organised crime finds clever ways to export and import illicit cigarettes during the Covid-19 pandemic,” Michael explained. VIEW ARTICLE

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