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During the most recent tax hike, prices for a pack of 20 cigarettes rose from RM17 (US$4.02) to RM21.50 (US$5.08). Illicit cigarette trade filled up the gap left by legal sales. Its penetration rate increased from 36.3% in 2011 to 51% in 2016. This resulted in an estimated loss of RM4.4 billion (US$1.06 billion) in government revenue last year. From the year 2011 to 2015, average cigarette prices went up by more than 30% . If the price hikes do deter consumers, there should have been a corresponding decrease in total cigarette consumption. The Malaysian government needs to relook at its future strategies Attempts to minimise the prevalence of smoking failed due to the absence of policies to restrict black market activities. The government had oversimplified the problem by assuming price hikes would decrease the cigarette consumption in lower income families. However, with cheaper alternatives available, the citizens turned to illegal cigarettes with price tags of RM3 – RM8 (US$0.71 – US$1.89). Customs director-general Datuk T. Subromaniam appeared to be in denial, as he commented , “It (tax increase on cigarettes) is merely a measure to reduce the number of smokers in Malaysia and increase tax revenue.
NEW YORK: Tobacco giants Altria and BAT are to spend millions of dollars over the next year on self-critical advertising on broadcast television networks and in leading newspapers as part of a legal settlement of a case brought almost 20 years ago. In 1999 the US Department of Justice initiated a lawsuit over misleading statements the industry had made about cigarettes and their health effects; a document filed in the US District Court for the District of Columbia Monday evening by attorneys for Altria, BAT and the Justice Department, outlined the agreement all parties have reached. This involves Altria and BAT buying television spots, mostly on ABC, CBS or NBC, and full print ads in 45 or more newspapers, starting as soon as next month, the Wall Street Journal reported . The TV spots will run in prime time five days a week for 52 weeks, while the print ads will run on five weekends spread over four months and ads will also appear on the newspapers’ websites. These will display court-mandated text , with copy including: “Altria, R.J. Reynolds Tobacco, Lorillard, and Philip Morris USA intentionally designed cigarettes to make them more addictive” and “More people die every year from smoking than from murder, AIDS, suicide, drugs, car crashes, and alcohol, combined” . Altria, which owns Philip Morris USA, estimated that it will spend $31m fulfilling its obligations; BAT declined to cite a figure. “I think they’re getting off kind of lightly,” said John Boiler, co-founder of the 72andSunny agency, which also does work for the anti-tobacco, non-profit Truth campaign. “The good news for the tobacco companies is they’ll avoid a lot of their younger audience,” he explained, since those consumers would be more likely to see a video ad on Facebook than a prime-time TV ad. 2016 research by the Centers for Disease Control and Prevention in Atlanta has suggested that younger consumers are more likely to be exposed to ads for e-cigarettes: 70% of US teens had seen ads for e-cigarettes – most often in-store (55%), but also online (40%), on TV or in movies (37%) and in print (30%). “The same advertising tactics the tobacco industry used years ago to get kids addicted to nicotine are now being used to entice a new generation of young people to use e-cigarettes,” said CDC director Dr.
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