Illegal cigarette sellers hurting legitimate sundry shops, harms gov’t revenue, grocers’ biz survival

 

THERE have been stepped-up of enforcement exercises nationwide but illicit cigarettes remain widely available, an indicating that illegal distribution channels continue to operate openly in many areas.

Such is the stance of the Federation of Sundry Goods Merchants Associations of Malaysia (FSGMAM) following findings from the latest Illicit Cigarettes Study (ICS) 2025 by NielsenIQ as highlighted by the Confederation of Malaysian Tobacco Manufacturers (CMTM),

According to the findings, illicit cigarettes account for about 54.4% of total cigarette consumption in Malaysia.

As such, the continued presence of illicit cigarettes in the market is placing increasing pressure on legitimate neighbourhood retailer.

“These are real businesses run by real families who contribute to the formal economy,” rued the grocer group’s president Hong Chee Meng.

Federation of Sundry Goods Merchants Associations of Malaysia president Hong Chee Meng

 

“When sales are diverted to illegal sellers, it harms both government revenue and the survival of small retailers.”

On this note, Hong claimed that many law-abiding sundry shops are increasingly losing customers to illegal cigarette sellers operating outside the regulated retail system.

“What we are increasingly seeing is illegal cigarettes being sold openly by unlicensed retailers and non-members, including shops operated by migrant workers who are not part of our association and who do not follow the same regulatory requirements,” he observed.

As it is, legal cigarette prices currently range between about RM12.40/pack and RM18.40/ pack while illicit cigarettes are commonly sold for RM3/pack to RM8/pack thus creating a large price gap that draws customers away from legitimate retailers.

“When cigarettes are sold far below the government-approved price, it naturally attracts more customers. Many consumers are drawn to these outlets because they know they can get cheaper cigarettes there,” justified Hong.

Despite enforcement exercises having been stepped up nationwide, illicit cigarettes remain widely available at half or less the retail price of legal ciggies (Image credit: Bernama)

“As a result, these shops tend to enjoy higher foot traffic while law-abiding sundry shops lose not only cigarette sales but also other purchases that usually come with them.”

This is despite the fact thar cigarettes remain a regular purchase item in sundry shops and often drive additional sales.

When customers come in to buy cigarettes, they usually pick up other items such as drinks, snacks or household goods as well. When that purchase shifts to illegal sellers, the impact goes beyond one product, it affects the entire business.

A healthy retail environment is one where legal businesses can compete fairly. Reducing the illegal cigarette market is important not only for government revenue but also for the survival of neighbourhood shops that serve communities across the country. –  Focus Malaysia