First it was the booze. Now the government task force targeting illegal alcohol imports – including the confiscation of tens of thousands of bottles of alcohol – has begun cracking down on illegal cigarette imports, officials said.
As a result, local vendors in Yangon are experiencing a shortage of supply that has forced up the price of well-known brands by more than half.
The price of Marlboro, Dunhill, Kent and Esse, many of which are smuggled into the country, has risen in recent weeks from about 12.5 to 66.6 percent, depending on vendor and brand.
A task force member who requested anonymity said they had recently confiscated and destroyed at least one truckload of cigarettes near the Chinese border and were monitoring other illicit imports.
“We don’t plan to raid cigarette vendors or shops in downtown Yangon, but we are closely watching how shipments get here,” he said.
Imports of most brands have been banned in Myanmar since 1995 as “non-essential items”.
The crackdown, entailing confiscations and prosecutions, is making traders think twice about smuggling, said U Win Myint, spokesperson for the Ministry of Commerce. “Suppliers daren’t carry the products anymore,” he said, adding that fewer illicit cigarettes were being sold on the streets.
He also said the government had no plans to ease cigarette import regulations despite current efforts to relax alcohol import rules.
Cigarettes and other outlawed commodities are smuggled over land borders, particularly at the Thai border crossing at Myawadi, Kayin State, as well as through shipping containers, and by individuals flying in from Singapore, Malaysia and Hong Kong.
With supply down and stocks low, several premium brand cigarette vendors in Yangon have been forced to increase prices to make up for the drop in trading volume.
“We hardly sell any more as some customers don’t want to pay the higher price,” said 32-year-old vendor Ko Khin Maung, adding that he now asks K3000 for a pack of Marlboro, up from K1800 just two weeks ago.
Ko Khin Maung – one of only a handful who sell premium cigarette brands in Yangon – said sales at his shop in front of Bogyoke Market had dropped by more than half since last month’s crackdown. “I can’t cut prices because of my expenses,” he said.
U Win Naing, a vendor near Trader’s Hotel, said supply cuts had forced him to charge between 12.5 to 20pc more for Marlboro and Esse imported from Singapore and Malaysia, making K200-K300 profit a pack.
A cigarette supplier at Theingyizay wholesale market in Pabedan township said fear of the customs had reduced the use of shipping containers for smuggling. “Some traders who import cigarettes in small amounts are not making much profit,” he said.
Despite the raids, the government still has difficulty preventing smuggling due to a lack of manpower and equipment able to detect contraband, said the commerce ministry’s U Win Myint.
“Some items are difficult to investigate thoroughly, as they are mixed with other items of a similar nature so that it’s hard to recognise them when checking with an X-ray detector,” he said.
Cigarettes sold legally – those produced here – have been taxed 100 percent since the 2012-2013 fiscal year, up from 75 percent the year before, according to the Internal Revenue Department.
According to a 2007 World Health Organisation survey, 45 percent of Myanmar men use tobacco, as against only 8pc of women and 13pc of teenage boys.
International brands are planning to move into the local market. British American Tobacco, the world’s second largest cigarette manufacturer, announced in July that it would spend $50 million over five years to set up a new factory, while Japan Tobacco, makers of Winston, Camel, Mild Seven, Benson & Hedges, signed a joint venture with banking and industrial tycoon Kyaw Win last year to do the same.
source: The Myanmar Times
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