Sundry Association Concerned Retailers Face RM200 Million Cost for Cigarette Display Ban

KUALA LUMPUR, 10 July 2024 – The Federation of Sundry Goods Merchants Associations of Malaysia (FSGMAM) has voiced significant concerns over the proposed retail display ban for tobacco and vape products, citing a projected RM200 million costs of implementation for retail sector. 

This estimate is based on a recent poll conducted among FSGMAM members to get their views on the proposed measure that would be introduced under the Control of Smoking Products for Public Health 2024 (Act 852) soon.

The poll, which garnered responses from 256 members, revealed an overwhelming disagreement with the proposed ban for tobacco and vape products to be displayed at retail (96.9%), with respondents estimating that each retail premise will have to fork out up to RM5,000 to make adjustments to comply with the ban and it is estimated that there are 40,000 retailers involved in the sale of tobacco and vape products nationwide.

Additional impact cited include the ban would lead to a revenue decline of 20-30%, substantially affecting their businesses (82.1%), increased operational costs from having to hire more staff (69.5%), consumers turning to smuggled products (40.6%), and a decline in sales of products other than tobacco and vape (29.7%).

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Retailers concerned

Hong Chee Meng, President of FSGMAM expressed strong opposition to the proposed ban, highlighting the severe consequences for retail sector. “The proposed ban on display of tobacco and vape products is not just a minor inconvenience. Having to bear the high cost to make that adjustment is significant financial burden for small and medium-sized retailers across Malaysia. Our poll clearly shows that most of our members are deeply concerned about the high costs that they have to bear to comply with the ban, which could collectively amount to RM200 million.” 

“Retailers are already struggling with inflationary pressures, the decreased spending power of consumers due to the rising cost of goods. The proposed display ban, and the associated financial impact, will only exacerbate these challenges. The potential revenue decline is a serious threat to the livelihood of our members.”

The FSGMAM calls for the Government to adopt a balanced approach that would consider the economic impact to local retailers while meeting public health objectives. 

The FSGMAM remains committed to collaborating with the government to find mutually beneficial solutions that support both public health and the economic well-being of Malaysia’s retail sector.

“We understand and support the need for effective tobacco and vape control to protect public health. However, prohibitive measures such as the proposed display ban has great impact to local retailers. It is essential to find balanced and pragmatic solutions that address public health objectives without placing undue financial strain on retailers,” Hong concluded.