Illegal cigarettes still dominate Msian market, say tobacco manufacturers

Citing its Illicit Cigarettes Study (ICS) 2025 report, CMTM said despite minor improvements in parts of Sabah and Sarawak, the sale of such cigarettes remained high in both states.

It said about 77.3% of cigarettes sold in Sabah in 2025 were illicit, compared to 78.4% in 2024.

In Sarawak, the percentage dropped to 78.8% in 2025, from 80.9% recorded in 2024.

CMTM acknowledged coordinated efforts by enforcement agencies to disrupt illicit supply chains and strengthen border controls but warned that its ICS findings signalled concern over the use of fake tax stamps, or FTS, broadly accessible in the market.

The study revealed that the number of FTS increased nationally by 1.7% percentage points compared to 2024, with notable increases recorded in Johor, Penang, Melaka, Terengganu and Kelantan, indicating a wider penetration of FTS products across retail channels.

“Products bearing FTS are deliberately designed to mislead retailers and consumers into believing that they are genuine and tax-paid.

“This undermines confidence in the tax stamp system and weakens the effectiveness of enforcement,” a CMTM spokesman said in a statement.

CMTM urged the government to act against all FTS players and remove such products from the market in order to protect the integrity of the legal tobacco trade and prevent further deception.

In 2023, illegal cigarettes accounted for 55.3% of the Malaysian market, a 1.3% decline from 2022.

CMTM said the “porous” east coast border of Peninsular Malaysia was the root cause of the problem, leading to billions in tax losses.