What is the origin of the “first company to obtain the e-cigarette license” in Malaysia?

What is the origin of the "first company to obtain the e-cigarette license" in Malaysia?

The Malaysian government stated that any company that has not obtained an e-cigarette license will not be allowed to produce and sell e-cigarette products in Malaysia, and violators will be subject to legal sanctions. INGOO Soul Sdn Bhd is the first and only company to obtain full licenses for the production, sales, import and export of electronic cigarettes in Malaysia.
Editor's note: According to a report by the Malaysian business media "The Page" in April 2024, INGOO Soul Sdn Bhd is the first and only company to obtain full licenses for the production, sales, import and export of electronic cigarettes in Malaysia. Because the licensing system and company background mentioned in the article are not clear, in order to understand the truth, 2FIRSTS interviewed relevant parties, including the Malaysian E-Cigarette Association, the Malaysian E-Cigarette Consumers Association, the Consumer Choice Center and more industry observations person.

According to a report by the Malaysian business media "The Page" in April 2024, the Malaysian government is considering introducing a licensing system to target specific merchants selling e-cigarette products in order to begin standardized management of the domestic e-cigarette market to ensure the safety of the country's e-cigarettes. Compliance in the Tobacco Industry. The media reported that according to the final announcement by the Malaysian government agency, INGOO Soul Sdn Bhd is the first and only company to obtain a full license for the production, sales, import and export of electronic cigarettes in Malaysia. The scope of the license includes The company has engaged in the production and sales of e-cigarette smoking accessories and nicotine-containing e-liquid in Malaysia.

 

Under the new system, compliant e-cigarette products in the Malaysian market in the future will only be produced and supplied by companies holding a domestic e-cigarette license (Electronic Vape Liquid/Gel Production License), or legally imported from overseas; they must be produced in compliance with safety regulations Malaysian e-cigarette companies that meet the conditions can apply to government agencies for production and sales qualification licenses for e-cigarettes and related products, including e-cigarette oil, smoking utensils, disposable e-cigarettes, etc. Any enterprise that has not obtained an e-cigarette license will not be allowed to produce and sell e-cigarette products in Malaysia, and violators will be subject to legal sanctions.

 

Malaysia "opened up e-cigarette licenses", what is the origin of this "first company to get it"? What is the background of the proposal and implementation of the "license system"? Under the new "license system" system, how will it guide the transformation of the Malaysian and even the entire Southeast Asian market?

 

 

The "real body" of INGOO enterprise

 

According to public information, the registration number of INGOO SOUL SDN BHD in Malaysia is 202201006483 (1452180-V). However, other published information is quite sparse, and there is no official website to refer to.

On the Chinese Internet, except for the suspected public relations articles published by "The Page", there are no relevant reports. Among the commercial entities that can be checked, one named Shenzhen Yinggehun Technology Co., Ltd. was established on September 23, 2021, with a registered capital of 5 million yuan, a unified social credit code of 91440300MA5H0KKX3Q, and the legal representative is Xie Xiaofan. The company's address is located in Qianhai Shenzhen-Hong Kong Cooperation Zone, Shenzhen City, and its business scope includes the sales of electronic cigarette atomizers (non-tobacco products, not containing tobacco ingredients).

 

When the Malaysian E-Cigarette Association and the Malaysian E-Cigarette Consumers Association responded to 2FIRSTS' inquiries, they stated that they had not heard of the company and were not aware that any company had obtained the so-called "full license".

 

Ridhwan Rosli, chairman of the Malaysian Electronic Cigarette Association, said bluntly that according to the current Malaysian legal system, licenses are divided into national (federal), state (state) and local (local) levels, and are also divided into production, import and retail categories. It is impossible to have a single license that allows the production and retail of all lines of e-cigarettes. The pre-shelf license for e-cigarette products currently being discussed in Malaysia (similar to the PMTA in the United States) is also in the discussion stage and has not yet been implemented.

 

2FIRSTS tried to contact the publishing media organization "The Page" for confirmation. The spokesperson said that the colleague responsible for the reporting article would respond to the matter, but 2FIRSTS had not received a reply as of press time.

 

 

The beginning and end of the licensing system: from clearing tax dead corners to bringing retail under supervision

 

In the past year, Malaysia has ushered in a period of intensive regulatory implementation.

 

On November 30, 2023, the Democratic League passed the "Control of Smoking Products for Public Health Act of 2023" by a majority vote. A total of 27 members of Congress from both parties participated in the intense debate. The "smoking-free generation" clause was deleted from the bill, which aims to ban people born after 2007 from smoking.

 

In addition to discussions and discussions about the "smoking-free generation", discussions and debates surrounding the "registration system" and "license system" are also fermenting in Malaysia.

 

In April 2023, Malaysia required domestic e-cigarette manufacturers to register their production activities with the Customs Department (JKDM) before April 30, 2023. In a statement on April 2 that year, the Ministry of Finance (MoF) said that early registration within the prescribed period (April 1 to April 30) would prevent manufacturers from being fined for late registration.

 

The finance ministry said the registration this time was for licensing under the Excise Duty Act, 1976, to ensure full industry compliance and smooth tax collection by May 2023. With effect from April 1, 2023, by publishing the Goods and Services Tax (Amendment) Order 2023 in the Federal Gazette, the government will impose a consumption tax on e-cigarette liquids or gels containing nicotine at a rate of RM0.40 per milliliter. "With the implementation of this GST, the government will continue to ensure that all JKDM regulations and controls on excise goods are improved to prevent leakage of national tax revenue." This way, as promised in the 2023 Budget, "Half of the revenue from the excise tax on e-cigarettes will be reallocated to the Ministry of Health to improve the quality of health services."

 

This registration action in April 2023 is synchronized with Malaysia's imposition of consumption tax on nicotine-containing liquids or gels used in e-cigarette devices. Therefore, it can be seen that the goal of this move is to increase fiscal revenue and clear tax dead ends.

 

The store licensing system under discussion in 2024 was proposed by former Health Minister Khairy Jamaluddin. Sources from Health Minister Dzulkefly Ahmad said he will submit a memorandum paper to Cabinet on proposed regulations under the Public Health Control of Smoking Products Act 2024 (Bill 852). In the document, former minister Khairy Jamaluddin suggested that the government should introduce a licensing system to limit the sale of e-cigarettes to licensed stores.

 

A Malaysian market observer told 2FIRSTS that former Health Minister Khairy Jamaluddin, who proposed the licensing system proposal, was the promoter of the original "Smoke-free Generation" proposal. He believes that after the "Smoke-free Generation" was suspended in Malaysia, this "license system" is another political attempt by Jamaludin on e-cigarettes.

 

 

More controversy: Can the licensing system lead to a better future?

 

It is reported that while considering the launch of this licensing system, the Malaysian government will also provide tax preferential policies to support the production of domestic e-cigarette companies to promote the sustainable development of the industry and help domestic e-cigarettes move from chaos to a compliant market.

 

In the future, companies holding licenses will become the standard for regulating the e-cigarette market in Malaysia. In this regard, when interviewed by 2FIRSTS, the Consumer Choice Center (CCC) expressed concerns about the potential consequences that may affect consumers' access to safer e-cigarette alternatives.

The association said that while the proposed licensing regime is intended to address concerns related to e-cigarettes, introducing a licensing regime for selective vape shops could inadvertently hinder consumers' access to safer smoking options and inadvertently force consumers to Shifting to non-regulated channels, thereby undermining public health objectives. Tarmizi Anuwar, representative of the Malaysian Center for Consumer Choice, emphasized that using e-cigarettes is a safer option for nicotine ingestion. He believes that regulated products such as e-cigarettes are being sold in convenience stores and there is no need to sell them in specialty stores. The proposal for a "license system" would create a monopoly.

 

"Access to alternative products is critical to helping consumers quit smoking. The need for balanced regulation that prioritizes public health objectives while respecting consumers' right to choose is highlighted. By limiting supply from licensed e-cigarette shops, consumers may Opportunities to provide alternative products are important to help consumers quit smoking as they face limited choices and may switch to less regulated or unsafe alternatives. A selective store licensing system will only make it more difficult for consumers to access safer products. and tend to return to smoking and the black market."

 

And he also mentioned a point to 2FIRTS that people in rural or semi-urban areas will be at a disadvantage in accessing e-cigarettes, which is unfair to consumers in different regions.

 

Tamiz Anuwar said the association advocates for policies that give consumers access to a variety of safer vaping products while ensuring appropriate regulation.

 

Commenting further on the regulation of e-cigarettes, Tamiz stressed the importance of maintaining technology neutrality. By recognizing the diversity of nicotine-delivering products available on the market, including open, closed, or disposable e-cigarettes, heated tobacco, and oral nicotine, policymakers can create an environment that promotes consumer choice and innovation.

 

"Technology neutrality ensures freedom of choice and neither forces consumers nor businesses to use a specific technology. By using a specific technology, other technologies are discriminated against, thereby making production costs and the price of the final product higher. Furthermore, it is difficult for consumers to Get and buy e-cigarettes or alternatives that are less harmful and cheaper."

 

It is worth noting that this licensing system is only in the early stages and has not yet been implemented. As for INGOO Technology Company (INGOO), which claims to be the first and only company to obtain full licenses for the production, sales, import and export of e-cigarettes in Malaysia. Soul Sdn Bhd), whose true identity still remains a question mark. Industry insiders analyzed to 2FIRSTS that this PR release may be a pre-emptive move to pry open the Malay market before the policy is implemented.

 

2FIRSTS will continue to pay attention to the Malaysian market and regulatory trends around the licensing system.