Ban on vape sales ‘could be counterproductive, fuel black market'

The Sun

4 days ago

KUALA LUMPUR: There will be long-term implications, including potential job losses, particularly affecting Bumiputera entrepreneurs and SMEs, if the Selangor government decide to impose a ban on the sale of vapes and e-cigarettes.
Datametrics Research and Information Centre Sdn Bhd managing director Pankaj Kumar said that, alongside reduced state and federal tax revenues, an increase in illegal product sales that may pose public health risks, and continued regulatory uncertainty that could deter investment in both the industry and the broader retail sector.
'A state-wide ban would be short-sighted and counterproductive. It undermines national legislation (Act 852), penalises law-abiding businesses, and opens the floodgates to black market activity,' he told SunBiz.
When asked about risks that such a ban might worsen illegal trade or increase the circulation of unregulated vape liquids, Pankaj said, 'Absolutely. We have seen this happen in other markets.
'Bans tend to create a vacuum that bad actors quickly fill. The unintended consequence of prohibition is the rise of unregulated trade, where products are not tested, labelled, or taxed.
'Malaysia already faces a tobacco black market valued at RM5 billion annually. A vape ban will only exacerbate this issue, making it more difficult for enforcement agencies to track and regulate consumption.
'Worse, illicit vape products are often laced with narcotics, posing significant health risks to consumers and especially youth.'
Pankaj said a vape ban in Selangor, a state with one of the highest retail and commercial concentrations in the country, would significantly disrupt a legal industry that currently supports thousands of jobs and micro-enterprises.
He said based on data, the vape industry in Malaysia contributes RM3.48 billion in economic value, employing over 31,500 individuals, many of whom are Bumiputera entrepreneurs who operate small businesses.
'A state-wide ban would not only collapse these businesses but also reduce retail tax contributions and sales-based state taxes. Instead of regulating and collecting revenue from legal players, Selangor risks pushing economic activity underground, where it is untaxed, unregulated, and unsafe,' he added.
Asked what alternative policy approaches Selangor could consider instead of a full sales ban, Pankaj said several data-driven alternatives to a ban can be considered. These include strict enforcement against illegal substances in vape liquids, particularly narcotics and banned chemicals, along with the introduction of retail licensing systems to ensure only approved outlets sell compliant products.
'Implementing digital tracking and traceability can help verify that products are legally sourced and sold, while age-gated sales with ID verification at the point of purchase can prevent underage access.
'Complementing these measures with health education campaigns will help counter misinformation and discourage youth usage. Together, these steps can create a transparent and accountable industry that supports national health objectives without driving growth in the black market,' he said.
Recently, Selangor Menteri Besar Datuk Seri Amirudin Shari said the decision to ban vape sales in the state would be made after the public health committee chairman Jamaliah Jamaluddin presents a policy paper on the proposal to the state executive council.
He said the state government will prioritise public health and future generations as it weighs the consequences of prohibiting vape products.
Malaysia Retail Electronic Cigarette Association president Datuk Adzwan Ab Manas said the government should stay focused on enforcing Act 852 fairly and consistently.
'Legal businesses are prepared to comply with the rules. What undermines both public health and industry sustainability is the blanket ban on vaping at the state level.
'These bans do not stop demand, they just push consumers to the black market. Proper regulation and enforcement, rather than prohibition, are the most effective tools to protect public health while supporting legitimate businesses,' he said.
Adzwan pointed out that during a recent Parliament session, Home Minister Saifuddin Nasution Ismail highlighted a study conducted by Universiti Sains Malaysia Hospital involving 152 students in Kelantan, where vape has been banned since 2016.
The study found that among 152 students who vaped, 65% were vaping products mixed with magic mushrooms, which is considered more concerning than methamphetamine and syabu drugs.
'This is strong evidence that a ban does not work,' he said.
Adzwan stated that for legal vape players committed to compliance, the current regulatory framework under Act 852 is workable.
'Many of our members, who include a significant number of Bumiputera entrepreneurs and SMEs, have already submitted the necessary paperwork and are in the process of aligning with the law.
'However, the real threat now is from state-wide bans. These bans disproportionately hurt legitimate businesses, especially smaller local entrepreneurs. The real issue is abuse of vape products, not the legal, regulated products being sold. The government should focus on cracking down on misuse and illegal substances, not punishing those who are playing by the rules,' Adzwan said.