KOTA KINABALU, Feb 24 — Edgar F used to smoke a pack and a half of Marlboros a day and even carried a spare pack whenever he went out, which the advertising sales executive has also found helpful when networking.
But the 34-year-old started looking for alternatives late last year, citing the increasingly higher price of cigarettes.
He has tried vaping and even quitting, without success. After a few months, Edgar has resigned himself to buying contraband cigarettes, which cost less than half the price of his usual Marlboros.
“The cost just got too much, and the hike in November was just the last straw. RM18 was just ridiculous; it’s more expensive than my meal. But I couldn’t quit and for better or worse, I’ve found a good replacement in these contrabands,” he told the Malay Mail Online.
Edgar is among many who have turned to the black market to source for cigarettes in the face of rising costs. The difference in price, from RM17 for his Marlboros and RM5 for a pack of Premiums was too big a difference to ignore.
The introduction of the Goods and Services Tax (GST) last April was seen as an added burden to already rising cost of living and Sabahans have been forced to look at belt-tightening alternative.
Edgar’s friends have also looked for alternatives; some are now into vaping, others buy loose tobacco leaves — whether commercial or locally grown — and roll their own, which are also deemed a lot cheaper.
Market demands
In Sinsuran, facing Kota Kinabalu city’s central market, a woman who gave her name as Khadijah sits on a plastic stool along a sidewalk surrounded by dried seafood and other sundry goods whiling away her time chatting with acquaintances, checking her mobile phone and shooing away the occasional pigeon that comes too close.
A passer-by stops in front of her. After a brief talk, she reaches into an old box and pulls out a bright blue plastic container. In it are a few packs of cigarettes of various colours. She takes out a pack and hands it over.
She said she used to display the cigarettes openly in a plastic basket, along with packs of tissues and peanuts, but the authorities would quickly confiscate her goods.
In Ranau, a street kid, no more than 10 years old, runs over to a man who had beckoned to him asking him for the contents in a black plastic bag he is clutching.
“Ada Era, Premier, sama GG,” the boy says, his eyes darting around. “Lima,” he adds, indicating that a pack of Indonesian Era and Premium cigarettes sell for RM5.
The man chooses a brand and the boy hands over a pack in exchange for a few ringgit before running off with several other street children in the vicinity.
Contraband cigarettes are openly sold by these sidewalk agents in towns across Sabah. They comprise local-born and foreign men and women and sometimes street children who make sales of RM4 to RM6 per pack.
They blend easily into the foreground, looking like any other pedestrian with a bag in which they stash their black market goods. Era and Premium are the most common, and come in several versions. Some vendors in the east coast might offer Hope and Champion from the Philippines.
The brands are not immediately recognisable here because they are contraband, shipped over from the Indonesian borders by smugglers who evade customs and tax and thus, keep prices low.
“They taste fine. I don’t see what’s wrong with it, I would rather buy my cigarettes legitimately and I still prefer Marlboros but the taste of the contrabands are fine, just a little different,” according to Edgar.
Nowhere in Malaysia is contraband cigarettes more widespread than in Sabah, where smuggling activities occur in almost every major town.
The Customs Department reported that smugglers usually come in through high-powered speedboats from Labuan in the west coast and from the outlying islands of Indonesia and the Philippines in the east coast.
The speedboats are quick to zip in and out between the two countries, carrying fuel, cigarettes, narcotics, alcohol and occasionally firearms and people among others. Security and enforcement authorities try to stop them, but a high-speed chase on high seas are not without risks.
The curfew on the coastal areas of the east coast has been of some help with tightened border security but smugglers still manage to seep through the cracks.
The sale of contraband cigarettes in Sabah is so rampant; it surpasses the national percentage of 32.2 per cent. It is estimated that three out of 10 packets of cigarettes are contraband. Most major towns will sell them, ranging from RM4 to RM6.
“There is definitely a higher demand now, people cannot afford the branded cigarettes. It used to be that it was just a few people from the villages and the immigrants manual labourers who would buy them, but now even office workers, and more urban working adults are resorting to contraband cigarettes,” said a coffee shop owner in Penampang who requested anonymity.
“My supplier sends them to me, he said that he gets them on a regular basis from Indonesia. I am willing to sell them even though it’s literally under the table, as long as there is demand,” he said.
Legal versus illegal smokes
The British American Tobacco Malaysia Group recently announced their domestic volume decrease of 13.5 per cent in consumption in 2015 versus 2014.
A recent study done by tobacco companies in Malaysia suggested that the industry volume has been decreasing in the last decade, with 10.5 billion sticks of cigarettes sold in 2015, compared to 12.2 billion sticks in 2014. The last Nielson Illicit Cigarette Study in 2014 indicates that illicit cigarettes makes up 33.7 per cent of the market.
“The illegal cigarette trade in the country, including East Malaysia remains at alarmingly high levels of well over 30 per cent and in recent times has been exacerbated by the steep excise tax hike of almost 40 per cent in November 2015.
“Despite the strong and comprehensive enforcement efforts by the Customs Department to curb the sale of contraband cigarettes, we expect it to rise substantially across the country due to the price disparity between legal and illegal cigarettes,” said Philip Morris Malaysia managing director Goh Shea Lih.
Other alternatives wanted too
The much talked about vaping industry in Sabah, like everywhere else, has been thriving in the last year or so, with over 50 shops in Kota Kinabalu and many more individual suppliers.
A vendor estimates that about 10 new sellers venture into the business every week, and the market is getting bigger.
“Depending on the rate you smoke, vaping can be a lot cheaper, too, and many rave about the smoother feel and lack of smell,” said one seller.
A vaping electronic sells for RM200 and above, which lasts indefinitely while bottles of vape juice sell for between RM40 and RM95, that can last for about ten days depending on how heavy a smoker the user is.
“People are just trying to adjust to the new higher costs of living. More and more people are forced to look for alternatives and new ways of saving money, or living within their means,” said Edgar.
But the 34-year-old started looking for alternatives late last year, citing the increasingly higher price of cigarettes.
He has tried vaping and even quitting, without success. After a few months, Edgar has resigned himself to buying contraband cigarettes, which cost less than half the price of his usual Marlboros.
“The cost just got too much, and the hike in November was just the last straw. RM18 was just ridiculous; it’s more expensive than my meal. But I couldn’t quit and for better or worse, I’ve found a good replacement in these contrabands,” he told the Malay Mail Online.
Edgar is among many who have turned to the black market to source for cigarettes in the face of rising costs. The difference in price, from RM17 for his Marlboros and RM5 for a pack of Premiums was too big a difference to ignore.
The introduction of the Goods and Services Tax (GST) last April was seen as an added burden to already rising cost of living and Sabahans have been forced to look at belt-tightening alternative.
Edgar’s friends have also looked for alternatives; some are now into vaping, others buy loose tobacco leaves — whether commercial or locally grown — and roll their own, which are also deemed a lot cheaper.
Market demands
In Sinsuran, facing Kota Kinabalu city’s central market, a woman who gave her name as Khadijah sits on a plastic stool along a sidewalk surrounded by dried seafood and other sundry goods whiling away her time chatting with acquaintances, checking her mobile phone and shooing away the occasional pigeon that comes too close.
A passer-by stops in front of her. After a brief talk, she reaches into an old box and pulls out a bright blue plastic container. In it are a few packs of cigarettes of various colours. She takes out a pack and hands it over.
She said she used to display the cigarettes openly in a plastic basket, along with packs of tissues and peanuts, but the authorities would quickly confiscate her goods.
In Ranau, a street kid, no more than 10 years old, runs over to a man who had beckoned to him asking him for the contents in a black plastic bag he is clutching.
“Ada Era, Premier, sama GG,” the boy says, his eyes darting around. “Lima,” he adds, indicating that a pack of Indonesian Era and Premium cigarettes sell for RM5.
The man chooses a brand and the boy hands over a pack in exchange for a few ringgit before running off with several other street children in the vicinity.
Contraband cigarettes are openly sold by these sidewalk agents in towns across Sabah. They comprise local-born and foreign men and women and sometimes street children who make sales of RM4 to RM6 per pack.
They blend easily into the foreground, looking like any other pedestrian with a bag in which they stash their black market goods. Era and Premium are the most common, and come in several versions. Some vendors in the east coast might offer Hope and Champion from the Philippines.
The brands are not immediately recognisable here because they are contraband, shipped over from the Indonesian borders by smugglers who evade customs and tax and thus, keep prices low.
“They taste fine. I don’t see what’s wrong with it, I would rather buy my cigarettes legitimately and I still prefer Marlboros but the taste of the contrabands are fine, just a little different,” according to Edgar.
Nowhere in Malaysia is contraband cigarettes more widespread than in Sabah, where smuggling activities occur in almost every major town.
The Customs Department reported that smugglers usually come in through high-powered speedboats from Labuan in the west coast and from the outlying islands of Indonesia and the Philippines in the east coast.
The speedboats are quick to zip in and out between the two countries, carrying fuel, cigarettes, narcotics, alcohol and occasionally firearms and people among others. Security and enforcement authorities try to stop them, but a high-speed chase on high seas are not without risks.
The curfew on the coastal areas of the east coast has been of some help with tightened border security but smugglers still manage to seep through the cracks.
The sale of contraband cigarettes in Sabah is so rampant; it surpasses the national percentage of 32.2 per cent. It is estimated that three out of 10 packets of cigarettes are contraband. Most major towns will sell them, ranging from RM4 to RM6.
“There is definitely a higher demand now, people cannot afford the branded cigarettes. It used to be that it was just a few people from the villages and the immigrants manual labourers who would buy them, but now even office workers, and more urban working adults are resorting to contraband cigarettes,” said a coffee shop owner in Penampang who requested anonymity.
“My supplier sends them to me, he said that he gets them on a regular basis from Indonesia. I am willing to sell them even though it’s literally under the table, as long as there is demand,” he said.
Legal versus illegal smokes
The British American Tobacco Malaysia Group recently announced their domestic volume decrease of 13.5 per cent in consumption in 2015 versus 2014.
A recent study done by tobacco companies in Malaysia suggested that the industry volume has been decreasing in the last decade, with 10.5 billion sticks of cigarettes sold in 2015, compared to 12.2 billion sticks in 2014. The last Nielson Illicit Cigarette Study in 2014 indicates that illicit cigarettes makes up 33.7 per cent of the market.
“The illegal cigarette trade in the country, including East Malaysia remains at alarmingly high levels of well over 30 per cent and in recent times has been exacerbated by the steep excise tax hike of almost 40 per cent in November 2015.
“Despite the strong and comprehensive enforcement efforts by the Customs Department to curb the sale of contraband cigarettes, we expect it to rise substantially across the country due to the price disparity between legal and illegal cigarettes,” said Philip Morris Malaysia managing director Goh Shea Lih.
Other alternatives wanted too
The much talked about vaping industry in Sabah, like everywhere else, has been thriving in the last year or so, with over 50 shops in Kota Kinabalu and many more individual suppliers.
A vendor estimates that about 10 new sellers venture into the business every week, and the market is getting bigger.
“Depending on the rate you smoke, vaping can be a lot cheaper, too, and many rave about the smoother feel and lack of smell,” said one seller.
A vaping electronic sells for RM200 and above, which lasts indefinitely while bottles of vape juice sell for between RM40 and RM95, that can last for about ten days depending on how heavy a smoker the user is.
“People are just trying to adjust to the new higher costs of living. More and more people are forced to look for alternatives and new ways of saving money, or living within their means,” said Edgar.
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