LAST_UPDATEFri, 20 Jul 2018 10pm

Malaysia's Tobacco Outlook Dependent On Effort To Curb Trade In Illegal Cigarettes

KUALA LUMPUR -- Malaysia's tobacco outlook for this year is highly dependent on the effectiveness of the government's initiative in curbing trade in illegal cigarettes, says British American Tobacco (Malaysia) Bhd (BAT) Managing Director Erik Stoel.

The illicit tobacco market share in Malaysia reached a record high of 57.1 per cent as at December 2016, up from 36.9 per cent in 2015, he told a press conference after attending the company's 56th Annual General Meeting here, Tuesday.

Stoel said the company was happy with the no-excise-hike reassurance made by Second Finance Minister Johari Abdul Ghani recently.

Johari was reported as saying that the government had no intention of increasing the cigarette tax after a call made by Deputy Health Minister Dr Hilmi Yahaya to raise the country's cigarette prices to RM21.50 (US$4.88) per pack from the current RM17 (US$3.86) per pack.

"If the government is to increase the price of the cigarettes, it will be a wrong wrong thing to do at this stage," he said.

On the company's outlook for this year, Stoel believed that its market share and volume of its products would stabilise if the government did not increase the excise.

"We have seen stabilisation in our volume and market share to a marginal growth for the last couple of months.

"We also planned to continue investing in new products, and research and development for a better growth this year," he said.

BAT's market share in Malaysia fell to 57.1 per cent in the financial year ended December 31, 2016, down from 60.9 per cent a year ago, mainly dragged by the excise increase in November 2015.

Meanwhile, Stoel also reassured that the company would not exit Malaysia's market despite the challenging market environment.

"I don't think we'll ever consider to exit from Malaysia, that's very clear we are here for a longer term," he added.