Malaysia's Proposed GEG Bill Raises Concerns for E-cigarette Industry

According to reports from Malaysian media, the Malaysian "2023 Public Health Tobacco Products Control Act" (GEG Act) will be submitted to the lower house this week. According to the provisions of the GEG Act, children born in or after 2007 will be prohibited from smoking, purchasing, or possessing any type of tobacco product, including e-cigarette products, even after reaching the age of 18.

Upon the release of the news, public opinion has been stirred up. The GEG bill is being labeled as the "strictest smoking ban in the history of Malaysia".

According to the legislative process in Malaysia, once the GEG bill is approved by the lower house and upper house, it will be submitted for approval to the Head of State (i.e., the King of Malaysia). Upon the King's consent, the bill will become law and officially take effect.

Ridhwan Rosli, the Secretary General of the Malaysian Vaping and E-Cigarette Association (MVCC), has expressed concerns that the GEG bill could significantly damage the predominantly Malay-led e-cigarette industry in Malaysia.

What impact will the GEG Act have on Malaysia's e-cigarette industry? On October 9th, 2FIRSTS interviewed local e-cigarette manufacturers and distributors to find out.

GEG Bill: One of the Strictest Anti-Smoking Legislation

The GEG Act aims to prohibit the use of all tobacco products, including e-cigarettes, for individuals born after 2007 in Malaysia, hence it is also known as the "Generation Tobacco Ban". Additionally, the act imposes restrictions on the registration, advertising, promotion, sponsorship, packaging, and sale of tobacco products, including e-cigarettes.

The GEG Bill has been touted by the media as one of the most stringent anti-smoking bills globally. It was initially proposed by Malaysia's Health Minister, Khairy Jamaluddin, in July 2022 and received its first reading on June 12, 2023.

It is worth noting that New Zealand has also proposed a similar bill. However, the main difference lies in the fact that New Zealand has already passed relevant legislation in December 2022, banning the sale of tobacco products to anyone born after 2009.

MVCC: GEG Expected to Raise 5 Major Concerns

According to the latest data from MVCC, Malaysia has 250 e-cigarette manufacturers and 100 e-cigarette importers (compared to only 30 in 2019). In addition, there are approximately 7,500 general retail stores and 2,500 specialty stores exclusively selling e-cigarette products.

The MVCC believes that the GEG bill may give rise to the following issues:

The closure of e-cigarette companies has resulted in a loss of tax revenue for the country, hindering the development of both foreign and domestic investment in the manufacturing, logistics, distribution, and retail sectors. This has also impeded the growth of local entrepreneurs and led to the reduction of over 30,000 jobs in the e-cigarette industry. The hasty implementation of the legislation may potentially trigger black market issues.

Meanwhile, the Malaysian International Chamber of Commerce also believes that if the GEG bill is passed, Malaysia will be seen as unfriendly towards business and will potentially lose foreign direct investment.

E-cigarette companies are now stepping up their efforts by launching a joint petition to oppose the proposed ban.

How do E-cig Manufacturers Perceive GEG?

Two Malaysian companies expressed contrasting views in an interview with 2FIRSTS.

The Malaysian business manager of Chinese e-cigarette brand Lanavape, Jingye, expressed that based on past experience, the enforcement measures in Malaysia are not particularly strict, therefore they anticipate that this legislation may be difficult to effectively implement. As a result, e-cigarette industry professionals do not have much concern regarding this bill.

It was also disclosed by Jingye that Lanavape is continuing to expand in Malaysia, with plans to open more than 10 new stores.

Meanwhile, Lam, a staff member of another local distributor in Malaysia, believes that the GEG bill will impact the profits of e-cigarette businesses and could potentially result in an influx of more smuggled products into the market.

Lam revealed that the Malaysian e-cigarette association has started gathering e-cigarette merchants and consumers to sign a petition against the proposed law, with plans to present these petitions to the government in order to prevent the implementation of the GEG bill.

2FIRSTS will continue to monitor the progress of the GEG bill and its impact on Malaysia's e-cigarette industry.