A GENERATIONAL ban on tobacco products, including vape, for people born after 2005 will have an impact on the revenue of retailers.

The Malaysia Singapore Coffee Shop Proprietors’ General Association (MSCSPGA) said the ban will affect the earnings of coffee shops and restaurants that sell cigarettes.

But it will not be a huge loss of income for petrol stations, said Petrol Dealers Association of Malaysia (PDAM) president Khairul Annuar Abdul Aziz.

“In recent years, profits from the sale of cigarettes have fallen,” he said, noting that this was due to the rising costs of production.

As it stands, Khairul said petrol station operators now ask young customers who want to buy cigarettes for identification.

“Because of this, young people are not buying cigarettes at petrol stations,” he said.

The government’s bill on banning smoking and possession of smoking products, including e-cigarettes, for people born after 2005 is scheduled for tabling in the lower House, which is currently in session.

Health Minister Khairy Jamaluddin said the bill aimed to prevent the younger generations from picking up the smoking habit and reduce the number of smokers to less than 5% by 2040.

He said while the government earns RM3 billion a year in cigarette taxes, it expects to spend RM8 billion on treating smoking-related illnesses by 2030.

PDAM’s Khairul Annuar said enforcement and contrabands were the pressing issues that need to be addressed.

“If the government really wants to reduce the number of young smokers, it needs to tackle the problem of illegal cigarettes first.”

Malaysian Indian Restaurant Operators Association deputy president C. Krishnan, said the law banning smoking at restaurants, which was introduced by the Pakatan Harapan government, should be strictly enforced.

He said many restaurants may opt not to sell cigarettes at all if there are more rules governing the sale of the product

“Furthermore, the profit from selling cigarettes is getting smaller and smaller. A pack of cigarettes used to cost RM5 but now it has risen to RM17 a pack. To avoid hassle, retailers may just choose not to sell at all,” said Krishnan.

He said restaurants will not lose much if they stop selling cigarettes and that it is the anti-smoking law that is affecting businesses.

For grocers and sundry shops, cigarette revenue varies from location to location, said Federation of Sundry Goods Merchants Associations of Malaysia president Hong Chee Meng.

“For example, sundry shops near construction sites and maybe in the suburbs do good business selling cigarettes. But they don’t do as well in urban areas with higher health awareness.

“More young people are choosing not to smoke and they also don’t like it when their parents smoke.”

Hong said overall, revenue from selling cigarettes is dropping and make up only a small fraction of income for grocery stores.

The MSCSPGA did not agree that the generational ban will have little impact.

It said its more than 20,000 member in the coffee shop business will be affected as cigarette sales bring in significant revenue.

“In addition, the Ministry of Health (MOH) did not provide details on how to execute this plan but it is likely that retailers are expected to check the MyKad of customers. This is going to be very difficult as customers are all adults and a lot of people will be reluctant to show their MyKad for a retail transaction,” it said in a statement.

“The worst part is the fact that the MOH did not even outline any proposal to address the illegal cigarette trade, which makes up 60% of the cigarette sold in the market.”

In 2020, the government lost an estimated RM5 billion in uncollected taxes from contraband cigarettes. – July 26, 2022.