PETALING JAYA: Malaysia’s plan to phase out vapes, beginning with open-system devices, is sparking strong reactions from industry players who warn that a poorly managed ban could devastate businesses, cost thousands of jobs and expand the very black market the government seeks to curb.
Health Minister Datuk Seri Dzulkefly Ahmad said last week the ministry is drafting a Cabinet memorandum to introduce the ban in stages.
The move follows Act 852, the Control of Smoking Products for Public Health Act 2024, which came into force last October to regulate tobacco and vape products.
While the Act set a regulatory framework covering advertising, packaging and sales restrictions, the government now intends to go further by outlawing vape devices altogether, starting with open-system products.
Industry stakeholders argue that the sudden shift creates regulatory uncertainty and undermines investor confidence.
Datametrics Research and Information Centre managing director Pankaj Kumar said based on the latest available industry report, Malaysia’s vape market is valued at RM3.48 billion.
According to the National Health and Morbidity Survey 2023, Malaysia has 1.2 million vape users, he noted.
“Since Act 852 came into force, the market has been clouded by uncertainty. The real problem is the lack of clarity. While Act 852 provides a framework, ongoing talk of bans has left businesses unsure of how to plan for the future,” Pankaj told SunBiz.
He added that potential tax reforms under Budget 2026 are adding further pressure.
“Retailers are facing a ‘double squeeze’ regulation, without any clear direction on one side and looming tax burdens on the other. This uncertainty has stalled confidence and increased the risk of more activity shifting into informal or unregulated channels, mainly due to lack of enforcement,” Pankaj said.
The vape industry is not small. According to the Malaysian Vape Chamber of Commerce (MVCC), the sector supported 31,500 jobs in 2023 and was projected to contribute RM288 million in excise tax revenue between 2021 and 2025.
“Retail value stood at RM3.48 billion in 2023, supporting a workforce of 31,500 people,” said MVCC secretary-general Ridhwan Rosli.
“These businesses contribute to local employment, SME growth, and tax revenues. A shrinking industry would not only threaten livelihoods but also reduce this important tax stream.”
Ridhwan acknowledged the government’s public health objective but argued that banning open-system devices unfairly penalises compliant businesses.
“The concerns driving such a proposal are largely linked to illegal and unregulated players, not the legal, licensed retail sector. Banning legitimate products will not solve misuse issues. Instead, it risks pushing more consumers towards unregulated sources,” he said.
Both Datametrics and MVCC stressed that bans are likely to alter consumer behaviour in unintended ways.
“Consumer behaviour typically follows three paths: a minority will quit, some will revert to cigarettes, particularly dual users and a significant share will turn to black-market products if legal access is removed or made too expensive,” Pankaj said.
“Without strong enforcement against illicit trade, bans may end up enlarging the very market the government is trying to curb.”
Ridhwan echoed the concern, saying a recent consumer survey of Malaysian vapers showed high opposition to strict retail restrictions, and the majority reported their intent to seek illegal sources if legal channels become too restricted.
“Demand doesn’t disappear overnight, it often shifts to unregulated markets where product safety is unknown. That outcome would undermine the government’s safety goals,” he said.
From a business standpoint, industry players warned the financial hit could be severe.
“If a full ban is enforced, the legal market could collapse by more than 90% from its current RM3.48 billion value. Over 31,000 jobs, many tied to SMEs and family-run businesses, would be wiped out,” Pankaj said.
“What will remain is an underground economy where products are sold without standards, tax contributions or consumer protections.”
For vape retailers, the uncertainty is already biting.
“For most, this is not a matter of adjusting business models. If the ban is enforced, their businesses will be wiped out entirely. Many have invested heavily in premises, staff and compliance and now face the prospect of closing their doors with no recourse,” Ridhwan said.
Instead of pursuing prohibition, MVCC is calling for stricter enforcement of existing laws.
“Malaysia already has a comprehensive law in place – the Control of Smoking Products for Public Health Act 2024. Rather than introducing new bans, the priority should be to properly enforce this Act. If fully implemented, it is more than sufficient to address concerns without destroying a legal industry or driving consumers into the black market,” Ridhwan said.
MVCC will continue to pursue constructive advocacy and, if necessary, legal review.
“If the government proceeds with measures that have disproportionate economic impact or are procedurally rushed, we will consider legal options to ensure fair process and to protect members’ legitimate business interests,” Ridhwan added.
For now, with Cabinet discussions pending, industry players remain in limbo, bracing for a decision that could reshape the country’s RM3.48 billion vape market and the livelihoods tied to it.
Source:
The Sun Daily
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