CIGARETTE sellers have baulked at Putrajaya’s latest requirement that all retailers apply for a sales licence for the product from January 1, with some threatening not to sell it altogether.

They were particularly unhappy at having to pay RM150 for the licence, especially as cigarette sales were declining.

The licence is issued by the National Kenaf and Tobacco Board under the Plantations and Commodities Ministry.

Johor Baru Coffee, Restaurant and Bar Merchants Association deputy president Yong Wa Kong said at least 50% of coffee shop owners in Johor Baru have threatened not to sell cigarettes if the government was adamant that they pay the fee.

Yong said cigarette sales were sluggish due to competition from smuggled smokes and e-cigarettes.

“Cigarettes are very expensive now. Older smokers therefore tend to buy the ‘cheaper’ smuggled cigarettes, while hip and young smokers prefer e-cigarettes,” he said.

Yong said coffee shops that sell cigarettes used to make a 10% profit margin, roughly making an average profit value of one pack for every 10 sold.

“Now that’s gone.”

The problem has been compounded by the cigarette companies themselves, he said.

“They changed their marketing approach from in-person to online sales.”

He said such circumstances and the licensing requirement have made retailers think about giving it up.

Yong said the association would take up these complaints with the authorities and cigarette companies.

Klang Coast Sundry Goods Merchants’ Association president Tan Teck Hock complained of the short notice given by the government for licence applications.

He said traders received the notice only two months ago, and now have mere weeks to get it.

“We are concerned because some elderly grocery store owners might not know how to apply for the licence online.

“There’s not long left until January 1.”

Tan said he was told some older owners have indicated that if the application process was too complicated, they would rather not sell cigarettes.

He appealed to the government to consider extending the deadline to enable older operators sufficient time to submit applications.

Like Yong, Tan said the RM150 annual fee for the cigarette licence was too high.

“Cigarettes already have thin profit margins. With smuggled cigarettes proliferating the market, there is no profit to make with cigarettes.

“I think most people will choose not to sell cigarettes.”

Besides the new cigarette licence, Tan said merchants were already spending between RM1,500 and RM2,000 on business, advertising, liquor and municipal council licences.

“If we add the cigarette licence, the cost will be even higher.”

Tan said a cost of RM50 to RM100 would be more affordable.

Federation of Malaysia Sundry Goods Merchants Association president Hong Chee Meng said his group met with a senior aide of Deputy Prime Minister Fadillah Yusof three weeks ago, when Fadillah was still plantations and commodities minister.

“The aide promised to submit the memorandum to the minister. Our suggestion then was to incorporate cigarette licence regulations into the business registration licence and waive the fee,” Hong said.

“However, the cabinet was reshuffled, and the minister changed. We will try to meet with the new deputy minister, Chen Hong Jian, as soon as possible,” he said.

He said he hoped the new minister could decide on the matter soon.

Hong said it was inappropriate to burden operators with additional licences.

The government has implemented tobacco product control regulations in three stages since last year.

The first stage involved awareness and advocacy, the second allowed businesses to obtain tobacco or tobacco product sales licences for free, and the third, starting January 1, would charge sellers for licences.

The Plantations and Commodities Ministry at the time said the third stage would involve the enforcement of the regulations. – December 13, 2023.