Malaysia’s vape industry too big to be unregulated

KUALA LUMPUR: The vape industry in Malaysia, valued at an estimated RM2.7 billion, is too substantial to remain unregulated, said the Malaysian Vape Chamber of Commerce (MVCC).

MVCC called on the government to immediately introduce appropriate regulations on e-liquids with nicotine, saying that the move would produce a positive multiplier effect on the economy including creating more jobs and attracting foreign direct investment (FDI).

In conjunction with the launch of its Malaysian Vaping Industry report, MVCC today said: “The findings show that there are more than 3,300 businesses related directly to the vape industry, with a workforce of more than 15,000 workers.”

MVCC estimated that workers in the vape industry were paid up to RM450 million in wages in total in 2019.

MVCC president Syed Azaudin Syed Ahmad said the findings strongly indicated that the sector was a viable and growing industry in Malaysia and can contribute significantly to the local economy.

Syed Azaudin said it had facilitated the growth of local entrepreneurs, many of which were local and Bumiputera businesses.

“In addition, the Malaysian vape industry currently has an established ecosystem comprising manufacturers, importers and retailers, and a growing distribution and logistics network,” he said.

In Malaysia, the government has announced an excise tax on vape devices and e-liquids which has been implemented since January 2021.

However, MVCC believes that the tax regime needed to be broadened to include e-liquids with nicotine which make up 97 per cent of the Malaysian market, in order to effectively contribute to the government’s revenue.

“The Malaysian vaping industry has significant potential that can be unlocked with practical and comprehensive regulation that must include the use of e-liquids with nicotine.

“This will spur the growth of small and medium enterprise (SMEs), which will in turn create jobs and generate tax revenue for the government,” said Syed Azaudin.

The global e-cigarette and vape market size is expected to reach US$67.31 billion (RM272.54 billion) by 2027, registering a revenue-based CAGR of 23.8 per cent from 2020 to 2027, according to a new study by Grand View Research.

Syed Azaudin said while other sectors were seeing challenges to attract investments, Malaysia was in a good position to attract FDI into this sector.

“MVCC believes the vaping sector is ready and capable to attract quality FDIs given its established ecosystem that global investors and multinational companies would find appealing.

“MVCC has spearheaded this study in order to provide the government with a solid data driven foundation to immediately introduce regulations on the vape industry,” he added.

Source: NST