Cigarette price discount ban in the works

Few Cigarettes

Malaysia is intending to accept a new rule that will ban price discounts on tobacco products, namely on cigarettes, in order to reduce smoking rates, Philip Morris (Malaysia) corporate affairs director Richard James reported.

Today cigarette makers are permitted to suggest discounts of not more than 5 percent off the retail price for one month and up to three times a year. These discounts are usually introduced when cigarette makers launch new products.

James said that Philip Morris, which produces famous cigarette brands like Marlboro and L&M, wa not opposed to the Health Ministry’s proposed plan because cigarette makers have been informed of the measure and given enough time to respond.

Richard James said that if the move is intended to discourage smoking, then tobacco companies have no problem with it as they have been given advance information of the move and Philip Morris is preparing for it.

Besides, James said that the ban on price discounts has not been publicized officially so it is unclear when it will be enforced.

He added that the intention to ban price discount on tobacco products belongs to the government. Therefore, it should be identified if Philip Morris includes price discounts on cigarettes in business plans in the pipeline.

The Health ministry had made an announcement that the new minimum price for a 20-stick pack of cigarettes will be RM7, up from RM6.40, and only cigarette packets with 20 sticks can be sold from Sept 1. The new measure is focused on reducing the possibility of youth to buy cigarettes.

James said that Philip Morris does not have any problems with the new rule as whenever the cigarette excise tax increases, the floor price will increase as well.

He added that Philip Morris recognizes the necessity to control the tobacco industry as smoking is harmful for people’s health.

“Australia’s attempt to introduce the plain packaging act, which is based on implementation of plain packaging and terrible graphic health warnings, is an example of an extreme measure that has no evidence-based materials to support it,” he said.

James considers that Malaysia’s regulations and pricing of tobacco products are one of the strictest in Asia-Pacific.

“Malaysia has minimum price laws for selling cigarettes, and the Health Ministry must accept all retailers’ pricing proposals of tobacco products before they can sell them.

“The graphic warnings on tobacco packaging are as well among the largest in the region, after Australia, covering at least 40 percent of the front of cigarette pack and 60 percent on the back,” said James. Australia introduced a complete ban on tobacco advertising in the country.

In Malaysia, Philip Morris is the third-largest cigarette company after British American Tobacco and JT International.

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