Retailers struggle with sudden implementation of tobacco regulations

KUCHING (Oct 19): Despite a 6-month extension to comply with Act 852 until April 2025, Malaysian retailers are grappling with overwhelming challenges.

The Act, while well-intentioned in its mission to curb smoking and protect minors, has inadvertently placed small businesses on the brink of collapse.

While the extension is seen as a concession, it is still insufficient for such a sweeping policy change, with more time needed for education and preparation across the entire industry.

Wong Teu Hoon, president of the Malaysia Singapore Coffee Shop Proprietors’ General Association (MSCSPGA), said many local retailers were blindsided by the announcement.

“While we support reducing smoking, the timeframe to comply is completely unrealistic,” he said. “Retailers need at least two years to adjust to these sweeping changes.”

One of the primary concerns is the widespread confusion about what Act 852 entails. Many retailers and consumers are unclear about the specific requirements of the law, leading to uncertainty about compliance.

According to reports, many retailers have continued to display tobacco products openly, unaware of the new legislation’s requirements.

Meanwhile, president of the Federation of Sundry Goods Merchants Associations of Malaysia (FSGMAM), Hong Chee Meng, stressed the logistical issues retailers face.

“Many retailers are uncertain about how to operationalise this ban,” he said. “We’re being forced to comply with vague guidelines and no support.

“For small sundry shops with minimal staff, how are we supposed to manage hidden products and maintain customer service?”

For sundry shops, which often operate with minimal staff, the need for extra employees to manage concealed tobacco products adds another layer of complexity.

Customers who once picked up their preferred tobacco products directly from shelves will now have to request them from behind concealed displays, slowing down transactions and affecting overall service efficiency.

The point-of-sale display ban, a key aspect of Act 852, has sparked concerns about its unintended consequences. Hiding legal tobacco products from view could push consumers toward the already booming black market.

This shift would not only undermine the government’s efforts to regulate tobacco sales but also make it harder for retailers to compete with illegal vendors.

Retailers, particularly small business owners, have voiced concern over the immense cost and logistics of complying with the new regulations. In addition to the display ban, new rules regarding packaging, labelling, and signage add further complexity.

The cost of compliance alone is estimated at RM620 million in the first year, according to the Petaling Jaya Coffeeshop Association.

Wong elaborated: “These compliance costs are staggering. For small businesses already struggling with rising operational costs, this could be the tipping point. If legal cigarette sales—which make up 20 per cent of our revenue—are crippled by these regulations, we will not survive.”

For many retailers, including small sundry shops, the costs associated with implementing the ban are insurmountable. Each shop faces up to RM6,000 in modifications to hide tobacco products from view.

According to the Federation of Sundry Goods Merchants Associations of Malaysia (FSGMAM), this translates to a nationwide burden of RM300 million.

These costs are further exacerbated by inflation and the general economic slowdown, leaving retailers with little hope of recovery if forced to comply.

A further extension of the grace period could give them the time needed to make these adjustments without jeopardizing their livelihoods.

While the Ministry of Health remains committed to enforcing Act 852, it’s clear that more time and support are needed to ensure successful implementation.

The government must consider extending the grace period to at least two years, allowing for comprehensive education on tobacco regulations and offering financial assistance to affected retailers.

Moreover, focusing on Tobacco Harm Reduction (THR) strategies, as successfully implemented in other countries, could provide a more balanced approach to reducing smoking rates.

Studies have shown that display bans alone often fail to curb smoking and sometimes lead to increased illicit tobacco sales. The government must rethink its approach to ensure public health goals are met without crippling small businesses.