MALAYSIA. The share price of British American Tobacco (M) Bhd fell -3.8% to a seven-month low yesterday on news that the Health Ministry plans to ban the sale of duty free cigarettes.
The stock lost MYR1.75 (US$0.46) to close at RM44.50 with 661,900 units traded yesterday. However, shares in rival JTI International Bhd closed unchanged at RM4.30.
Health Ministry Disease Control Division Deputy Director, Dr Abdul Rasid Kasri said yesterday that the division would issue recommendations soon to the Government to abolish all sales of tax free and duty free tobacco products.
If passed into legislation, this would mean a ban on the sale of tobacco items at international airports and designated duty free areas, including the islands of Langkawi and Tioman, he added.
Business Times in Malaysia quoted Avenue Securities as saying that duty free cigarettes equate to less than 8% of total cigarette consumption in the country. However, it said that volumes are set to increase in light of a recent steep rise in domestic taxation and subsequent retail pricing.
International Travel Retail Confederation (ITRC) director-general Keith Spinks told The Moodie Report yesterday: “Early intelligence from Malaysia suggests that this is a very serious threat.
“Our understanding of the political structure is that the health ministry official would not have been able to comment publicly without first gaining at least consensus agreement from the government in support of any policy statement. In other words, the proposal to ban the sale of duty free tobacco products would appear to have government support.”
MORE ON THE PROPOSED ABOLITION IN MALAYSIA
“A very serious threat” – ITRC: Duty free tobacco sales at risk in Malaysia – 05/10/04
MORE STORIES ON THE WHO PROPOSALS
South African Department of Health withdraws duty free tobacco ban proposal – 08/06/04
WHO Framework Convention on Tobacco Control now signed by 100 countries – 08/04/04
ITRC issues wake-up call to duty free tobacco industry – 13/02/04
