Understanding the Challenges Posed by the Illicit Tobacco Trade and the Affordability of Tobacco Products in Malaysia

: (Alternative Format Thesis)

Abstract

Governments worldwide have responded to the associated health risks by introducing tobacco control policies, including tax-induced price increases on tobacco products. These policies aim to reduce the tobacco products’ affordability and, consequently, consumption and related morbidities. However, the Tobacco Industry (TI) is widely known to oppose tax increases in many countries, arguing that they will fuel the illicit tobacco trade (ITT). Moreover, the TI serves as the primary source for estimates regarding the extent of ITT, including in Low- and Middle-Income Countries (LMICs) where data availability and access are limited. Despite TI data on the ITT often having been criticised for methodological issues which lead to overestimates of the problem, those data are frequently utilised by the TI to lobby against tobacco control policies worldwide. Focusing on Malaysia as a case study and as a suited example of an LMIC, this thesis aims to explore and understand the challenges posed by ITT and the affordability of tobacco products in the country.

This thesis consists of four substantive chapters comprising five research papers that draw upon two primary study designs, quantitative and mixed method approaches. Papers I & II (presented together in Chapter 2), Paper III (Chapter 3), and Paper V (Chapter 5) utilise quantitative study designs. Paper I estimates the extent of the ITT in Malaysia by utilising government-produced data and employing the commonly used tax gap approach. It calculates the difference between the excise tax actually paid and the tax that should have been paid if all tobacco consumed in the country were legally sold and taxed. Paper II presents updated estimates based on a critique of the estimates presented in Paper I and another independent study that was published about the same time as Paper I. Paper III identifies statistical inconsistencies that occur when measuring the ITT in Malaysia using official government data and various existing/new methodologies, including trade statistics and cigarette expense statistics, and compares this with measuring the ITT in the UK (a High-Income Country) as a comparator benchmark. Paper V explore the dynamics of cigarette affordability in Malaysia over time by employing the Relative Income Price (RIP) approach and variants of it. This involves using various financial measures of wealth and consumption estimates among different socioeconomic groups, including those in urban and rural areas to understand which wider versions of the RIP offer unique and useful insights into cigarette affordability in Malaysia. Paper IV (Chapter 4) employs a mixed quantitative and qualitative method, utilising a content analysis approach based on the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) guidelines to explore the prevalence of TI-funded data on the ITT within Malaysian media discussions relating to tax policy. The analysis focuses on the most common claims/discussion points regarding ITT and tobacco tax policy before and after the 2015 tax increase.

The exploration of the extent of the ITT in Paper I indicated a substantial problem in Malaysia, a notion further confirmed by Paper II. The tax gap estimates, calculated at 40.7% in 2011, escalated to 69.9% in 2019. Paper III highlights considerable disparities in the results obtained using various government data sources and different methodologies to estimate ITT in Malaysia, contrasting with the UK where figures are more consistent across methods. Regarding media coverage of the ITT and tobacco tax policy in Malaysia as discussed in Paper IV, notable spikes are observed in newspaper coverage between the pre-budget announcement and the actual implementation of tax increases, except from 2016 onwards, when no tax increase occurred. The presence of the TI in media discussions on these topics is concerning, with the TI identified as a more frequent source in newspaper coverage than government sources. In terms of cigarette affordability, Paper V highlights fluctuations in the percentage of wealth needed to purchase cigarettes over the years of study. From 2009 to 2012, there was a minor decrease in the percentage of wealth needed to buy cigarettes (indicating increased affordability), followed by an increase, peaking in 2015 and 2016 (indicating decreased affordability), and then another decline, suggesting a trend towards increased affordability in smoking in more recent study years (2016 to 2019). Although different versions of the RIP provide some varying insights on affordability changes, the overall trend remains consistent across all versions of the RIP.

This research aims to contribute to the existing body of knowledge by offering new and comprehensive insights into the challenges of the ITT and cigarette affordability. The findings of this study raise awareness among policymakers about the ongoing challenges related to the ITT in Malaysia. Moreover, alongside these findings, specific policy recommendations are presented to address these challenges. This highlights the urgent need for more stringent enforcement measures, robust policy interventions, and collaborative efforts among government agencies and law enforcement bodies. Additionally, this research highlights the importance of regularly identifying and addressing TI actions, including possible media manipulation, that may influence government efforts to implement tobacco control policies.

Date of Award	13 Nov 2024
Original language	English
Awarding Institution	University of Bath
Supervisor	Rob Branston (Supervisor), Allen Gallagher (Supervisor) & Anna Gilmore (Supervisor)