Malaysia - new tobacco tax should be positive for multinationals..

January 2, 2009 - Malaysia's new floor price of MYR6.40 ($1.86) for a pack of 20 cigarettes will be positive for the multinationals, according to Maybank Investment Bank Bhd, because it narrows the gap between extremely-low priced and value-or-money cigarettes.

The new minimum retail comes into effect on January 1. The new regulations, aimed at discouraging smoking among underage and lower-income consumers, will also prohibit promotional prices for cigarettes, although price discounts of not more than 5 percent are allowed up to three times a year.

Maybank noted the measure was unlikely to impact overall cigarette consumption, as contraband accounts for nearly 40 percent of Malaysian cigarette sales.

Reference: New Floor Price Augurs [good omen] Well for Industry, Source: Tobacco Reporter, TobaccoChina.com, 12/31/2009.

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