Explainer: How Malaysia Is Creating A Nicotine Economy

Declassifying liquid nicotine now enables local manufacturers – who were previously restricted by the Poisons Act – to produce vape and e-cigarette liquids with nicotine and potentially take over market share from foreign companies.

KUALA LUMPUR, May 1 – Today, the government is expected to begin collecting excise duties on e-cigarette and vape liquids with nicotine, after local manufacturers were given last month to register with the Customs Department.

The taxation of e-liquids with nicotine was implemented following Health Minister Dr Zaliha Mustafa’s shocking decision last March 31 to exempt liquid nicotine from control under the Poisons Act 1952, vetoing the independent Poisons Board that had unanimously rejected the proposal.

This is an explainer on the impact of the policy decision to declassify and tax liquid and gel nicotine used in electronic cigarettes and vape:

Hasn’t vape always been sold openly prior?

Former Health Minister Khairy Jamaluddin said recently that the vape industry has flourished for years in Malaysia due to complications in enforcement.

Enforcers cannot immediately take action when they raid a vape store, as they do not know immediately if the e-liquids contain nicotine. So enforcers make the seizure first and send the product to the lab to check for the presence of nicotine before action can be taken, he had said.

Galen Centre for Health and Social Policy chief executive Azrul Mohd Khalib estimates that 90 per cent of the Malaysian market is nicotine-based vape that is mostly illicit and imported, while 10 per cent is non-nicotine. Vape disposables with nicotine are mostly imported from China.

The local production of vape and e-cigarettes was mostly non-nicotine due to Poisons Act restrictions; local companies manufacture both open and closed vape systems. Open systems are refillable and customised vape liquids, whereas closed systems are manufactured and sealed at the factory like vape pods and disposables.

Malaysia is currently the world’s largest exporter of vape liquids. Malaysia’s vape industry was estimated last year to be worth RM2.7 billion, according to the Galen Centre, with 330 manufacturers and importers and 3,000 retail shops, employing around 15,000 people.

Declassifying liquid nicotine now enables local manufacturers – who were previously restricted by the Poisons Act – to produce e-liquids with nicotine and potentially take over market share from foreign companies.

International tobacco companies will also now be able to legally enter the Malaysian market with their vape and e-cigarette products.

Why can’t vape be regulated under current tobacco regulations?

The Poisons Act itself, under Section 17, prohibits the sale and supply of poisons to people aged under 18 years unless for the purposes of medical treatment.

Hence, exempting liquid nicotine from the list of scheduled poisons under the Poisons Act removes that protective legal barrier against minors accessing nicotine products.

Currently, there is only one piece of legislation that regulates cigarettes and other tobacco products – the Control of Tobacco Product Regulations 2004 that is under the Food Act 1983.

Placing tobacco regulations under the Food Act is not ideal because tobacco isn’t, well, food, which is why the Ministry of Health (MOH) has tried (unsuccessfully) across previous administrations for years for a standalone principal law, or Act, for tobacco control, like what exists in most countries.

The Control of Tobacco Product and Smoking Bill 2022 – which also covers vape and e-cigarettes – was finally tabled in Parliament last year under Prime Minister Ismail Sabri Yaakob’s government, but it failed to reach a vote before the dissolution of the 14th Parliament.

The Control of Tobacco Product Regulations does not cover vape and electronic cigarettes with nicotine as these are not tobacco products.

This means that unlike cigarettes and other tobacco products, vape and e-cigarettes with nicotine can now be legally sold to anyone, anyhow, anywhere.

Vape devices designed like cartoon character Doraemon and Marvel superhero Captain America sold in a pop-up store in a shopping centre in Kuala Lumpur. Photo taken by Boo Su-Lyn on April 30, 2023.

These electronic nicotine delivery systems (ENDS) can be sold to minors aged under 18; retail online or at any brick-and-mortar store, including pop-up shops near schools or convenience stores; and contain whatever fruity or sweet flavours without restriction. Warning labels on the dangers of nicotine are not mandatory. Some vapes with nicotine are even sold in Malaysia without nicotine listed on the label of ingredients.

E-liquids sold in Malaysia contain nicotine content as high as 50 mg. Countries like the United Kingdom, Europe, United States, and Indonesia limit nicotine content in vape and e-cigarettes to 20 mg, or 2 per cent.

Vape devices designed like cartoon or superhero characters (probably done without copyright licence) can be found in shopping centres in Kuala Lumpur. There are no restrictions on e-liquid volumes that can be legally sold for retail; vape disposables can contain as many as 10,000 puffs.

There are no restrictions on advertising, promotion and sponsorship of e-cigarettes or vape either. The Galen Centre notes that vape companies are sponsoring sports events, openly advertising and claiming medical benefits of using vape – these are strictly prohibited for tobacco.

What about the tobacco bill?

Dr Zaliha has promised to table the Control of Tobacco Product and Smoking Bill, renamed as the Control of Smoking Product for Public Health Bill 2023, in Parliament in the upcoming Dewan Rakyat meeting scheduled from May 22.

However, the government is highly unlikely to table the tobacco and vape control bill due to the potential lack of support from MPs on both sides of the aisle, unless the generational end game (GEG), which prohibits tobacco and vape products for anyone born from 2007, is decoupled from the bill.

But this would be anathema to anti-tobacco advocates, who have been sold on the tobacco and vape end game by Khairy from the previous administration – a vision of a smoke-free generation modelled after the New Zealand legislation passed last December that bans the sale of tobacco to anyone born from 2009.

How bad is the smoking/ vaping problem in Malaysia?

The National Health and Morbidity Survey (NHMS) 2019 estimates 21.3 per cent national smoking prevalence among adults aged 15 and above in Malaysia, or 4.9 million people. Broken down by gender, though, smoking rates are much higher among men – more than 40 per cent of men aged 20 and older currently smoke.

Crucially, the NHMS 2019 finds that adult smoking prevalence in Malaysia has plateaued for more than a decade.

According to the NHMS, about 4.9 per cent of adults aged 15 and above use e-cigarettes or vape, or 1.1 million people.

The Galen Centre highlights estimates from industry surveys that found 32 per cent of vaping respondents are women. At least 600,000 children aged between 11 and 18 years have taken up vaping. Many vape users are also dual users who also smoke cigarettes.

“Vape in Malaysia remains unregulated, unrestricted, and out of control,” Galen Centre head Azrul said in a March 29 press release.

Is vape safer than smoked tobacco?

Unlike tobacco, there is no data on the long-term effects of vape or e-cigarettes.

UK and New Zealand health authorities say that vaping is much less harmful than smoking. A 2022 update by England’s Office for Health Improvement and Disparities, published last September, found that in the short and medium term, nicotine vaping poses “a small fraction” of the risks of smoking. However, “vaping is not risk-free, particularly for people who have never smoked”.

Ikram Health Malaysia president Dr Mohd Afiq Mohd Nor, who is also a clinical specialist and emergency physician, recently argued that the use of vape for tobacco harm reduction lacked evidence and was tainted by influence from the tobacco industry.

Nicotine, a highly addictive substance, also poses gender-specific risks, such as serious birth defects, menstrual cycle changes, and fertility issues in women, said Prof Dr Dayang Anita Abdul Aziz, a paediatric laparoscopy and surgery specialist, who is also chair of the health committee of the National Council of Women’s Organisations (NCWO).

The medical fraternity, particularly pharmacists, and even lawyers have roundly condemned Dr Zaliha’s decision to declassify liquid nicotine. Human Rights Commission of Malaysia (Suhakam) commissioner Prof Noor Aziah Mohd Awal described it as an act of negligence, saying that the prime minister and health minister could be sued for misfeasance in public office.

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