BAT accuses Health Ministry of selective prosecution

BAT accuses Health Ministry of selective prosecution
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KUALA LUMPUR (Nov 14): British American Tobacco (Malaysia) Bhd today slammed the Ministry of Health (MoH) for carrying out selective prosecution of a legitimate tobacco company selling legal non-cigarette products while turning a blind eye to cheap illegal contraband.

This comes as the MoH overturned its approval granted on July 12, 2018 for BAT to sell its "mini-cigar" — the Dunhill HTL-Cigarillo — as a non-cigarette tobacco product.

In a letter dated Oct 21, 2019 sent to BAT's wholly-owned subsidiary Commercial Marketers and Distributors Sdn Bhd (CMD), the Ministry said that upon analysis of the Cigarillo, MoH found that the Cigarillo falls within the definition of a cigarette under the Control of Tobacco Product Regulations 2004 and that it will be required to comply with the restrictions applicable to cigarettes under the regulation.

"We are especially baffled by the fact that there are other legal cigarillo products in the market today, but these products were not a part of any enforcement actions. Only DUNHILL HTL-Cigarillos were the focus of these raids. This also shows an inconsistency in the way MoH applies their policy," said BAT Malaysia managing director Erik Stoel in a statement today.

Stoel criticised the Deputy Director General (Public Health) of the Health Ministry Datuk Dr Chong Chee Kheong for his unexpected 'U-turn' decision, claiming it highlights the challenging and unreasonable parameters imposed on a legal tobacco company to operate in this country.

"This product was approved as a non-cigarette not only by MoH for sale a year ago but also by the Royal Malaysian Customs. Revoking it unilaterally without any chance of consultation is against any reasonable expectation of a legal business, let alone a public-listed company like us," he said.

As such, CMD has today filed an application for a judicial review on the decisions made by the MoH to recategorise DUNHILL HTL-Cigarillo as a cigarette and to revoke its approval for sale as a non-cigarette tobacco product.

In the application, CMD sought the following reliefs:

> that CMD be granted leave to apply for an order to quash the MoH decisions;

> for declarations that the MoH decisions are null and void; and

> for damages to be assessed in respect of all loss and injury sustained by CMD by reason of and/or incidental to and/or arising from the MoH Decisions in relation to the Cigarillo.

Stoel accused the Ministry of intentionally coordinating a raid in East Malaysia affecting over 100 retailers weeks before a revocation letter was issued to the company. This, he said, deprived the company any chance to comply with the MoH revocation letter.

The revocation letter allows the company a period of one month to remove the product from the market.

"The heavy-handed approach we have endured is reflective of MoH’s subjective interpretation of the law without consultation of legal tobacco players.

Furthermore, Stoel highlighted that 65% of the cigarettes consumed in the country are cheap illegal contraband. As such, he lambasted Chong for focusing on the wrong issue.

"The Deputy DG of Health and the Tobacco Control Sector has clearly lost the plot. The reality is that the Ministry’s own ineffective policy-making has undermined its own health agenda. Smoking consumption has grown by 5% and according to MoH data incidences of youth smoking have increased to 13.8% on the back of easily available illicit tobacco. Should that not be a priority of the Ministry?" he asked.

Under the regulation, a cigarette is defined as “any product which consists wholly or partly of cut, shredded or manufactured tobacco, or of any tobacco derivative or substitute, rolled up in a single or more wrapper of paper, and which is capable of being immediately used for smoking”.

Dunhill HTL-Cigarillos are cigarillos which are best described as a "mini-cigar", according to BAT. Unlike a cigarette which is wrapped in paper, a cigarillo is wrapped in tobacco leaves or tobacco based material comprising of homogenised tobacco more commonly known as reconstituted tobacco.