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Manufacturers call on Govt to view tobacco GEG law holistically, warn of domino effect on businesses

FMM In The News: THE EDGE MARKETS, KUALA LUMPUR, Thursday, October 6, 2022 -  Local manufacturers have called on the Government to have engagement with all stakeholders in the tobacco and vape supply chain before measures such as the generational endgame (GEG) law are implemented. These include manufacturers, warehouses, logistics, distributors, sundry retailers, and convenience store and coffee shop operators.

The Federation of Malaysian Manufacturers (FMM) said while it agrees that steps need to be taken to reduce the prevalence of smoking in Malaysia, measures such as the GEG need to be viewed more holistically.

"If not managed properly, the implementation of the proposed Control of Tobacco Product and Smoking Bill 2022 may even cause an increase in unemployment rates in the long run, as businesses involved in the supply chain of these products could be forced to trim down their workforce due to lower revenue," its president Tan Sri Soh Thian Lai said in a statement on Thursday (Oct 6).

Soh added that the federation is concerned with the domino effect on the business community and the country’s economy arising from the proposed Bill. At the heart of the proposed legislation is a bold new provision to ban smoking and possession of tobacco products, including vape, for people born on and after Jan 1, 2007, as part of a GEG for smoking in the country.

"We also cannot discount the impact of such policies on foreign investors. Malaysia could be perceived as a restrictive country, which will discourage foreign direct investment, as the GEG policy sets a precedent that could be imposed onto other industries in the future for similar reasons," he said.

The FMM is of the view that the focus should be on addressing illicit tobacco products that are rampant in Malaysia, where close to 60% of products sold are smuggled.

"The GEG policy does not address this issue and instead may lead to worsening illegal cigarette trading activities. It is therefore important for the Government to come up with a win-win and holistic solution for both the Government and the industry in finding ways to reduce the prevalence of smoking, without taking drastic steps, especially in the current economic climate.

"The business community and the rakyat are already facing enough challenges, such as the rising cost of goods, and raw materials and labour shortages. There needs to be better engagement with stakeholders in the supply chain for the industry to find a middle ground on the matter," said Soh.

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