Practitioners in the local electronic cigarette industry in Malaysia are calling on the government to suspend and reconsider a series of new regulations under the 2024 Public Health Smoking Product Control Act, stating that these regulations may put the industry in a difficult situation.
This legislation was announced on February 2nd this year and is scheduled to take effect next month (October).
Electronic cigarette practitioners express strong dissatisfaction
The new regulations mainly prohibit the display of electronic cigarette products in ordinary stores and limit the sales volume of electronic cigarette liquid: the liquid capacity of each cartridge, mouthpiece, and disposable electronic cigarette shall not exceed 3 milliliters, and the bottled electronic cigarette liquid shall not exceed 15 milliliters. The regulations will come into effect next month, and all products that do not comply with the regulations will be confiscated and destroyed.
Industry reaction: Insufficient preparation time
Datuk Adzwan Manas, Chairman of the Malaysian Retail Electronic Cigarette Association (MRECA), said, "The preparation time given is too short, and the industry simply does not have a transition period. This sudden measure will have a serious negative impact on the electronic cigarette industry." He further pointed out that the industry needs more time to adapt to regulatory changes, especially for products that have just been put into production or are currently being manufactured.
The challenges posed by display bans and liquid restrictions
Ridhwan Rosli, Secretary General of the Malaysian Electronic Cigarette Chamber of Commerce (MVCC), also questioned the upcoming retail display ban, believing that it would force retailers to bear high renovation costs. He said, "The retail display ban will force merchants to renovate their counters and shelves, and currently no country has implemented a similar ban on electronic cigarette products
In addition, industry groups have expressed concerns about the limit on liquid capacity of electronic cigarettes, stating that it is a radical measure and that the Ministry of Health has not provided sufficient time for suppliers, manufacturers, and entrepreneurs to process existing inventory or unfinished orders. This restriction may result in a large number of products being confiscated and destroyed, further impacting the industry.
At present, the value of Malaysia's electronic cigarette industry has reached 3.48 billion Malaysian Ringgit. Local electronic cigarette liquid manufacturers have significant influence in the global market, and the global demand for electronic cigarette liquid in Malaysia has always been high. Industry groups believe that the introduction of new regulations will have a significant impact on this thriving industry and call on the government to provide a longer transition period and more flexible regulatory plans.
Datuk Adzwan Manas, Chairman of the Malaysian Retail Electronic Cigarette Association (MRECA), stated that the Ministry of Health passed new regulations at the last minute and implemented them after only one briefing, leaving industry practitioners with insufficient time to prepare for the transition.
Azwan mentioned that the new regulations include a ban on displaying electronic cigarette products at store counters, a limit of 3 milliliters for disposable cartridges, replaceable e-liquid compartments, and e-liquid content for disposable products, and a limit of 15 milliliters for bottled e-liquid. However, the current electronic cigarette e-liquid capacity on the market is generally between 30 milliliters and 60 milliliters. He believes that it should be gradually reduced every two years instead of a one-time significant reduction to 15 milliliters.
The Ministry of Health has not given all suppliers, manufacturers, and entrepreneurs enough time to complete their products. What about those who are still producing products that may take another month or two to complete, or manufacturers who have already ordered raw materials
In addition, Azwan pointed out that the Ministry of Health also requires the gradual elimination of existing inventory within six months, but the industry needs at least one year to complete this process. The registration fee for each electronic cigarette product is 5000 ringgit (approximately $1200), which is very high as they have already paid a lot of fees for Sirim certification and other regulatory requirements.
At a press conference after submitting the memorandum to representatives of the Prime Minister's Office, Azwan stated that a recent survey showed that most e-cigarette manufacturers are willing to pay a registration fee of 500 to 900 ringgit ($120 to $215) for each product.
The memorandum was signed by five associations, namely MRECA, Malaysia Electronic Cigarette and Tobacco Substitutes Association (MEVTA), Malaysia Electronic Cigarette Industry Advocacy Organization, Malaysia Electronic Cigarette Traders Association, and Malaysia Electronic Cigarette Chamber of Commerce, representing over 2000 electronic cigarette traders.
Azwan said that given that the e-cigarette industry is also an important source of revenue for the country, these groups are still pushing for negotiations with the Ministry of Finance led by the Prime Minister. The e-cigarette industry also supports displaying products behind counters instead of the government's proposed comprehensive display ban, which will affect their business.
We have always supported the regulation of the electronic cigarette industry, but we hope it can be gradually implemented. Don't push us to the brink of collapse with strict regulations at the last minute
71.3% of e-cigarette users in Malaysia oppose ban, fearing they may turn to black market
A consumer group for electronic cigarettes in Malaysia has expressed concerns about some key provisions of the upcoming Public Health Tobacco Control Act 2024 (Act 852). Recently, the Malaysian Electronic Cigarette Alliance (MVA) launched a survey on their views on the bill, collecting nearly 500 responses. The survey results show that:
·71.3% of respondents oppose the retail display ban. Among them, the main reasons for dissatisfaction were the inability to browse products before purchase (39.7%) and difficulties during the purchase process (38.3%);
·If the retail display ban takes effect, consumers may seek illegal alternatives (47.4%) or resume smoking (44.5%). Only 8.1% of respondents stated that they would completely quit vaping under limited circumstances;
·Most e-cigarette users are former smokers or transitioning from cigarettes to e-cigarettes (74.4%), and 81.9% of users use e-liquids containing nicotine, with 96.5% using e-liquids with nicotine content below 40 milligrams.
MVA Chairman Khairil Azizi Khairuddin commented that the survey results indicate that a retail display ban is not a solution. Restricting consumers' ability to browse and select legitimate products will only push them towards a black market where quality and safety are of concern.
Kerry also stated that regulatory agencies should consider the impact of such restrictions on consumer behavior. Electronic cigarette users should have the right to make informed choices, and implementing a retail display ban would deprive them of this right.
Kelly called on the Ministry of Health to reconsider the implementation of the retail display ban.
Bill 852 should prioritize measures to encourage smokers to switch to e-cigarettes, rather than imposing strict requirements on e-cigarettes and not distinguishing them from tobacco regulations. Otherwise, smokers will continue to smoke or e-cigarette users will turn to the illegal market, which will weaken the role that e-cigarettes can play in reducing smoking rates in Malaysia
Is Malaysia's ban on electronic cigarettes causing Chinese domestic electronic cigarette companies to get ready?
With Malaysia issuing a new smoking ban at the beginning of the year and including electronic cigarettes, this not so new electronic cigarette market in Malaysia seems to have given domestic electronic cigarette companies a new opportunity.
The ban on electronic cigarettes was originally a "negative" news, why would it become a "positive" for electronic cigarette companies
Firstly, Malaysia's regulations are relatively vague, and including electronic cigarettes in the smoking ban category means that electronic cigarettes are one step closer to "tobacco control". Next, relevant policies and regulations will be introduced to regulate and supervise electronic cigarettes. In a sense, this is another manifestation of "legalizing electronic cigarettes";
Secondly, Lee Boon Chye, Deputy Minister of Health of Malaysia, pointed out before the ban was introduced that "the government is drafting new legislation to regulate electronic cigarettes";
Thirdly, many professionals in the Malaysian e-cigarette industry have reported that it is possible to legalize e-cigarettes this year and impose taxes on nicotine e-liquid;
So, based on various sources of information, Malaysia's regulation of electronic cigarettes means that the authorities will "recognize" and "position" electronic cigarettes, and carry out "regulation" and "taxation".
This is definitely good news for domestic e-cigarette companies.
Elton, the head of Vape News Malaysia, an authoritative electronic cigarette media in Malaysia, hopes that through his sharing, we can further understand the current development status of the Malaysian electronic cigarette market.
Elton is the main person in charge of Vape News Malaysia, often shuttling between major e-cigarette exhibitions. Vape News Malaysia is not only an important driving force in the current Malaysian e-cigarette industry, but also one of the main channels for Malaysian e-cigarette users to learn about products, brands, and international information.
Elton said that the new smoking ban prohibits the use of electronic cigarettes in public places, indoors, restaurants, and cafes, regardless of whether they contain nicotine or not.
Although some places in Malaysia even prohibit the sale of nicotine e-liquid, most areas can still sell it normally. We do not have restrictions on e-liquid concentrations exceeding 20mg like the EU does, and many Malaysian businesses produce nicotine salt e-liquids ranging from 35mg to 50mg, "he added.
In terms of user habits, Elton stated:
The market is changing, and closed cigarettes are becoming more and more popular, but traditional smokers still tend to use refillable open cigarette devices.
At present, small cigarettes are very popular in the Malaysian market, with approximately 90% of all physical stores selling small cigarette products and nicotine salt e-liquids, while the once popular large smoke devices currently account for less than 10%
The seasoning of e-liquid is very important because Malaysia is different from China. As we all know, Malaysian e-liquid has a sweeter and cooler taste, which will be a challenge for many Chinese manufacturers to enter the Malaysian market
Due to Malaysia being the second or third largest producer of e-liquid in the world, we have a wide range of choices. However, users have become accustomed to the sweeter and more mint rich e-liquid flavors, so China's sealed cartridges do not taste so good to us and there is still a lot of room for adjustment
Elton revealed to the steam new forces that the popular "disposable small cigarettes" in China are not currently popular in the Malaysian e-cigarette market, and e-cigarette users prefer enclosed and oiled small cigarette devices.
The retail price of a sealed device is approximately RM150 (about RMB 245) or more (one battery pole+2 cigarette cartridges), while the refillable device is around RM90 to RM140 (about RMB 146 to RMB 228), and the disposable small cigarette is around RM30 (about RMB 49). The currently popular brands are Yueke Relx, NCIG, and Nanostix.
When it comes to the issues that need to be paid attention to for small cigarette products entering Malaysia now, Elton said that for open type small cigarettes that can be refilled with oil, the appearance design and feel are very important. However, the appearance design of enclosed small cigarettes is not a top priority for consumers.
In addition, the new forces also inquired about the policy issues that domestic businesses are most concerned about, and Elton provided the following answers:
The Malaysian government will formulate regulations by the end of this year. As for the specific timing, we cannot be sure, but overall the attitude should be positive.
The government will not ban the use and sale of electronic cigarettes, but it may impose taxes
The only question is whether the government will only allow tobacco companies to sell their products, which is also our biggest concern. However, everything depends on the end of the year. We hope to become like Indonesia, where the government taxes e-cigarette products so that we can still survive and continue to operate in the e-cigarette industry
On the other hand, domestic electronic cigarette manufacturer HCIGAR has also started market layout in Malaysia.
Steam New Force has learned that Haishige is currently deepening its operations in the Malaysian electronic cigarette market, creating products exclusive to the region, and operating a new brand AKSO, preparing to build the image of the new brand among Malaysian users.
HCIGAR stated, "Regulations will further regulate industry standards, but the details are not yet clear. Currently, Akso is in the brand building phase, and overall infrastructure and advertising channels are still in the cold start phase." It is reported that HCIGAR's revenue reached 300 million RMB last year, with Malaysia accounting for 26.7% (about 80 million RMB) of the total, and monthly product sales exceeding 100000 sets.
Overall, although Malaysia's electronic cigarette regulations are like the 'Damocles sword hanging over the head', they still cannot affect the determination of domestic operators to enter the country's electronic cigarette market.
In addition, the popularity of small cigarettes has also provided new development opportunities for domestic brands. There are unconfirmed reports that the sales of Yueke Relx in Malaysia have exceeded 20 million. From HCIGAR to Yueke, Malaysia may soon become a battleground for domestic e-cigarette companies.