THERE is a growing concern over the availability of illegal cigarettes
in the country with some being sold for as low as $2 per pack.
In 2010, the Brunei government
imposed a $5 duty per pack of 20 cigarettes.
The price hike was an attempt to
discourage people from smoking to reduce the risk of smoking-related chronic
diseases.
Two years on, a number of people
observed that the availability and consumption of cigarettes has not gone down
since the price increase.
However, there has been no
official research done to prove this assertion.
An economics lecturer, who wished
to remain anonymous, said that the price hike policy coupled with lax law
enforcement created the undesirable side-effect of a booming black market for
cigarettes.
"I have no doubts that the
policy (of price increase) was done with the best of intentions. But the
effectiveness of policies are not decided by their intentions, but the results
they produce."
The lecturer elaborated, "As
demand for cigarettes is high, a price increase means that consumers are forced
to look elsewhere for substitutes. And where there is demand, supply will arise
to meet it.
"The difference in price
between taxed cigarettes and untaxed cigarettes means that there will be no
shortage of those trying to make a profit from this disparity."
The lecturer asserted, "The
role and ability of law enforcement is critical here to try to effectively
constrain supply."
The ability to cut off the
illegal supply remains questionable.
"We read in the papers all
the time about court cases and the police reigning in people smuggling large
quantities of illegal cigarettes. But the fact of the matter is that this may
only be the tip of the iceberg."
The lecturer continued, "If
law enforcement was truly constraining supply, this would transfer into a
substantial price increase in illegal cigarettes. This isn't the case (in
Brunei) as you can find packs for as low as $2.
"High enforcement and risk
in the market is the number one reason why illegal drugs are so expensive for
example."
Hamizah Hj Ismail, a concerned
parent, said that the increase in the number of teenagers buying illegal
cigarettes means that they are in close contact with the black market ring.
"I am sure that these
suppliers of illegal cigarettes also sell other contraband goods like alcohol,
marijuana or even other drugs.
"Maybe previously young kids
would just get their older friends to buy them cigarettes from the local retail
shops, but now they are in contact directly with a much more dangerous supplier
who can offer them more damaging goods."
A 16 year-old student, who wished
to remain anonymous, said his supplier gives him discount if he buys by the
carton.
"He (supplier) prefers to
sell by the carton, so my friends and I usually chip in to buy a carton together.
He has the cigarettes most of the time, the most we have to wait is a few days.
"This is our best option as
we can't afford legal cigarettes."
The student refused to comment if
he had bought drugs from his supplier or if his supplier had ever tried to sell
him other illegal goods.
Md Afiq Shahrun, a private sector
employee, felt that the government should not remove the price increase, but
look for other ways to tackle the black market more effectively.
"Scrapping the price
increase would be the equivalent of conceding defeat and send out a public
message that the government cannot cope with the black market.
"It would also undermine the
credibility of the Ministry of Health and the law enforcement authorities who
have constantly fought to discourage smoking."
AARON ALWINES
The Brunei Times
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