Tobacco company raises cigarette prices in Malaysia

PETALING JAYA: British American Tobacco Malaysia (BAT Malaysia) has raised the prices of its cigarettes following the increase in excise duties of more than 30 per cent.

The new cigarette prices, effective today, are as follows: Dunhill range [RM17.00 (S$5.60)]; Kent (RM17.00); Benson & Hedges (RM17.00); Peter Stuyvesant (RM15.50); Pall Mall (RM15.50); Lucky Strike Plain (RM17.50) and Shuang Xi (RM18.00).

Following the cigarette excise hike, BAT is increasing its cigarette prices, taking into consideration the sum mandated by the excise increase and its impact on GST and inflationary cost pressures, said managing director Stefano Clini in a statement.

He said the tobacco industry had already been hit by a huge 12 per cent increase in cigarette excise just a year ago on Nov 1, 2014.

The 2014 hike was then followed by the implementation of the Goods and Services Tax (GST) at 6 per cent beginning April 1 this year.

"The legal tobacco market has declined by 10 per cent on a September year-to-date basis. This extreme hike in cigarette excise done against the backdrop of both weakened economy and consumer sentiments will definitely fuel further an already high level of illegal cigarettes, where one in three packs is illegal.

"We cannot imagine the impact that this more than 40 per cent increase in excise will have on the industry," he said, adding that the move will result in more illegal cigarettes flooding the market.

The giant tobacco company also expressed its "extreme disappointment and shock" at what it described as an unprecedented massive increase in excise duties.

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